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Annual Report2015

HEXZA CORPORATION BERHAD (8705-K)(Incorporated in Malaysia)

ANNUAL REPORT 2015

CONTENTS

Notice of Annual General Meeting

Corporate Information

Corporate Structure

Five-Year Group Financial Summary

Chairman’s Statement

Directors’ Profile

Audit Committee Report

Corporate Governance Statement

Additional Compliance Information

Statement on Risk Managementand Internal Control

Directors’ Report

Independent Auditors’ Report to the Members of Hexza Corporation Berhad

Statements of Profit or Lossand Other Comprehensive Income

Statements of Financial Position

Statements of Changes in Equity

Statements of Cash Flows

Notes to the Financial Statements

Supplementary Information - disclosure on realised and unrealised profits or losses

Statement by Directors

Declaration by the Officer Primarily Responsible for the Financial Management of the Company

Statement of Shareholdings

Properties owned by Hexza Corporation Berhad & its Subsidiaries

Proxy Form

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Annual Report 20152

NOTICE IS HEREBY GIVEN that the Forty-sixth Annual General Meeting of Hexza Corporation Berhad will be held at the Conference Centre, Level 2, Weil Hotel, Jalan Sultan Idris Shah, 30000 Ipoh, Perak Darul Ridzuan on Friday, 20th November 2015 at 12.00 noon for the following purposes:

A G E N D A

1. To receive the Audited Financial Statements for the financial year ended 30th June 2015 and the Reports of the Directors and Auditors thereon.

(Please referExplanatory Note A)

2. To approve the payment of a first and final single-tier dividend of 4.5 sen per share (9%) in respect of the financial year ended 30th June 2015. (Resolution 1)

3. To approve the payment of Directors’ fees of RM315,000 for the financial year ended 30th June 2015 (2014: RM282,500). (Resolution 2)

4. To re-elect Tuan Haji Mohd Jali @ Mohd Jalil Bin Sany who retires in accordance with Article 78 of the Company's Articles of Association and being eligible, offers himself for re-election as a Director of the Company. (Resolution 3)

5. To re-appoint the following Directors who retire pursuant to Section 129(6) of the Companies Act, 1965 and to hold office until the conclusion of the next Annual General Meeting:

(i) Dr. Foong Weng Cheong (Resolution 4)

(ii) Dato' Richard Ong Guan Seng (Resolution 5)

(iii) Datuk Dr. Foong Weng Sum (Resolution 6)

6. To appoint Auditors and to authorise the Directors to fix their remuneration.

Notice of Nomination pursuant to Section 172(11) of the Companies Act, 1965, a copy of which is annexed hereto and marked ‘Annexure’ has been received by the Company for the nomination of Messrs. Deloitte, who have given their consent to act, for appointment as Auditors and of the intention to propose the following ordinary resolution:

“THAT Messrs. Deloitte be and are hereby appointed as Auditors of the Company for the financial year ending 30th June 2016 in place of the retiring Auditors, Messrs. Deloitte & Touche and to hold office until the conclusion of the next Annual General Meeting at a remuneration to be determined by the Directors.” (Resolution 7)

As Special Business:-

7. Continuing in office as Independent Directors

(a) Subject to their re-appointment/re-election as Director, to re-appoint the following Directors to continue to act as Independent Directors of the Company:

(i) Dato' Richard Ong Guan Seng (Resolution 8)

(ii) Tuan Haji Mohd Jali @ Mohd Jalil Bin Sany (Resolution 9)

(b) To re-appoint Mr. Leong Keng Yuen to continue to act as Independent Director of the Company. (Resolution 10)

NOTICE OF ANNUAL GENERAL MEETING


Annual Report 2015 3

8. To consider and, if thought fit, to pass the following ordinary resolution:

Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

''THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to issue shares of the Company at any time until the conclusion of the next Annual General Meeting of the Company upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued capital of the Company for the time being and that the Directors are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad." (Resolution 11)

9. To transact any other business of which due notice shall have been given.

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN that the first and final single-tier dividend of 4.5 sen per share (9%) in respect of the financial year ended 30th June 2015, if approved by the shareholders, will be paid on 10th December 2015 to depositors who are registered in the Record of Depositors at the close of business on 26th November 2015.

A depositor shall qualify for entitlement to the dividend only in respect of:

a. Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 26th November 2015 in respect of ordinary transfers; and

b. Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

By Order of the BoardCHONG YOKE SENGCompany Secretary

Ipoh29th October 2015

Notes:1. A member, other than an exempt authorised nominee is entitled to appoint not more than two (2) proxies. A proxy may but need not be a

member of the Company. 2. A member who is an authorised nominee may appoint not more than two (2) proxies in respect of each securities account held; whereas an

exempt authorised nominee may appoint multiple proxies in respect of each omnibus account held.3. A member who appoints a proxy must duly execute the Form of Proxy, and if more than one (1) proxy is appointed, the number of shares to

be represented by each proxy must be clearly indicated.4. An instrument appointing a proxy, in the case of an individual, shall be signed by the appointor or his attorney duly authorised in writing or in the

case of a corporation, shall be either under its Common Seal or under the hand of an officer or attorney of the corporation duly authorised.5. The duly executed Form of Proxy must be deposited at the registered office of the Company not less than forty-eight (48) hours before the

time set for holding the meeting or any adjournment thereof.6. Only members whose names appear in the Record of Depositors as at 13th November 2015 will be entitled to attend and vote at the meeting.

NOTICE OF ANNUAL GENERAL MEETING NOTICE OF ANNUAL GENERAL MEETING


Annual Report 20154

NOTICE OF ANNUAL GENERAL MEETING (continued)

Explanatory Note AThis Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval by the shareholders and hence, is not put forward for voting.

Explanatory Notes on Special Business:1. Resolutions 8, 9 & 10 The proposed Resolutions 8, 9 & 10, if passed, will enable the named Directors to continue to hold office until the next Annual General

Meeting of the Company as Independent Directors notwithstanding that they have served a cumulative term of more than nine years. In line with the recommendation 3.2 of the Malaysian Code on Corporate Governance 2012, the Board on the recommendation of

the Nominating Committee, after the annual assessment of the Directors’ independence have recommended that Dato’ Richard Ong Guan Seng, Mr. Leong Keng Yuen and Tuan Haji Mohd Jali @ Mohd Jalil Bin Sany who have served as Directors of the Company for a cumulative term of more than nine years, be re-appointed as Independent Directors of the Company based on the following justifications:

(i) They have fulfilled the criteria under the definition of Independent Director pursuant to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

(ii) They each remain independent and actively participate in board discussions and provide an independent and objective voice on the Board.

(iii) They have in depth knowledge of the Company’s business operations and they are committed to devote sufficient time and attention to the Company.

(iv) They act in the best interest of all shareholders and will provide the check and balance to the Board.

2. Resolution 11 The proposed Resolution 11, if passed, will empower the Directors to issue shares in the Company up to an amount not

exceeding in total 10% of the issued share capital of the Company for the time being for such purposes as the Directors consider would be in the interests of the Company. This authority, unless revoked or varied by the Company in a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

The general mandate sought for issue of shares is a renewal of the general mandate sought in the preceding year. As at the date of Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors at the Forty-fifth AGM held on 22nd November 2014 and hence no proceeds were raised therefrom. The general mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares for purpose of funding future investment project(s), working capital and/or acquisitions.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

The details of Directors standing for re-election and re-appointment are set out in the Profile of Directors and the details of their interests in the securities of the Company are disclosed in this Annual Report.



NOTICE OF ANNUAL GENERAL MEETING (continued)

Date: 8th September 2015

The Board of DirectorsHexza Corporation BerhadLot 6 & 20, Persiaran TasekKawasan Perindustrian Tasek31400 Ipoh

Dear Sirs,

NOTICE OF NOMINATION OF AUDITORS

We, Summit Holdings Sdn. Bhd., being a shareholder of Hexza Corporation Berhad, hereby give notice, pursuant to Section 172(11) of the Companies Act, 1965 of our nomination of Messrs. Deloitte as Auditors of the Company in place of the retiring Auditors Messrs. Deloitte & Touche and of our intention to propose the following as an ordinary resolution at the forthcoming Annual General Meeting of the Company:

“THAT Messrs. Deloitte be and are hereby appointed as Auditors of the Company for the financial year ending 30th June 2016 in place of the retiring Auditors, Messrs. Deloitte & Touche and to hold office until the conclusion of the next Annual General Meeting at a remuneration to be determined by the Directors.”

Yours faithfully,SUMMIT HOLDINGS SDN. BHD.

DIRECTOR

Lot 6 & 20, Persiaran Tasek, Kawasan Perindustrian Tasek, 31400 Ipoh, Malaysia.Tel: 05-2917823 Fax: 05-2918460

‘Annexure’

(19671-W)


Annual Report 20156

CORPORATE INFORMATION

BOARD OF DIRECTORS

Datuk Dr. Foong Weng SumChairman & Group Chief Executive

Dato' Richard Ong Guan Seng Deputy Chairman/Independent Non-Executive Director

Dr. Foong Weng Cheong Non-Independent Non-Executive Director

Mr. Leong Keng Yuen Independent Non-Executive Director

Tuan Haji Mohd Jali @ Mohd Jalil Bin Sany Independent Non-Executive Director

Mr. Ooi Ying Hong Independent Non-Executive Director

AUDIT COMMITTEE

Dato' Richard Ong Guan Seng Chairman

Dr. Foong Weng CheongMr. Leong Keng YuenMr. Ooi Ying Hong

REMUNERATION COMMITTEE

Mr. Leong Keng Yuen Chairman

Datuk Dr. Foong Weng SumDr. Foong Weng CheongDato' Richard Ong Guan Seng

NOMINATING COMMITTEE

Dato' Richard Ong Guan SengChairman

Dr. Foong Weng CheongMr. Leong Keng Yuen

REGISTERED OFFICE

Lot 6 & 20, Persiaran Tasek,Kawasan Perindustrian Tasek,31400 Ipoh,Perak Darul Ridzuan.Tel : 605-291 7823Fax : 605-291 8546Email : [email protected] : http://www.hexza.com.my

COMPANY SECRETARY

Ms. Chong Yoke Seng (MIA 3672)

REGISTRARS

Symphony Share Registrars Sdn. Bhd.Level 6, Symphony House,Pusat Dagangan Dana 1, Jalan PJU 1A/46,47301 Petaling Jaya, Selangor Darul Ehsan.Tel : 603-7841 8000Fax : 603-7841 8151

AUDITORS

Deloitte & ToucheChartered AccountantsLevel 2, Weil Hotel, 292, Jalan Sultan Idris Shah,30000 Ipoh, Perak Darul Ridzuan.Tel : 605-254 0288Fax : 605-254 7288

PRINCIPAL BANKERS

AmInvestment Bank Berhad Hong Leong Bank BerhadHSBC Bank Malaysia BerhadMalayan Banking BerhadRHB Bank BerhadRHB Investment Bank Berhad United Overseas Bank (Malaysia) Bhd.

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities BerhadStock Code : 3298Stock Short Name : hexza



CORPORATE STRUCTURE AS AT 30TH JUNE 2015

HEXZACORPORATION

BERHAD


Annual Report 20158

FIVE-YEAR GROUP FINANCIAL SUMMARY

Year Ended 30th June 2015RM'000

2014RM'000

2013RM'000

2012RM'000

(restated)

2011RM'000

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Revenue 150,179 145,341 124,557 148,616 146,786 Profit Before Tax 19,358 10,748 10,073 8,979 16,268 Income Tax (3,844) (2,164) (1,191) (2,176) (2,833)Profit After Tax 15,513 8,584 8,882 6,802 13,436 Profit After Tax attributable to

shareholders of the company 14,030 8,079 8,475 5,962 12,104

STATEMENT OF FINANCIAL POSITION

Total non-current assets 107,650 122,378 125,546 132,291 122,872 Total current assets 136,607 129,077 115,250 116,964 109,505 Total assets 244,257 251,455 240,796 249,255 232,377 Shareholders' fund 218,034 215,444 213,499 213,982 207,814 Total non-current liabilities 8,488 9,304 9,889 10,397 7,093 Total current liabilities 10,938 20,141 10,533 17,394 10,405

SHARE INFORMATION Per Ordinary Share

Earnings per share (sen) 7.0 4.0 4.2 3.0 6.0 Gross dividend (sen)* 4.5 4.0 5.0 5.0 5.0 Net dividend proposed/paid (sen)* 4.5 4.0 4.0 4.0 4.0 Net assets (RM) 1.1 1.1 1.1 1.0 1.0

FINANCIAL RATIO

Return on shareholders' funds (%) 6.4 3.8 4.0 2.8 5.8

* The proposed first and final dividend for the financial year ended 30th June 2015 is subject to approval by the shareholders at the forthcoming Annual General Meeting of the Company.



202

206

208

204

210

212

214216

218

220

2011 2012 2013 2014 2015

RM

(mill

ion)

Year

208

214 213215

218

Shareholders' Funds

0

40

60

20

80

100

120

140

160

2011 2012 2013 2014 2015

RM

(mill

ion)

Year

147 149

125 145 150

Revenue

0

2

3

1

4

5

6

7

8

2011 2012 2013 2014 2015

sen

Year

6.0

3.0

4.2 4.0

7.0

Earnings Per Share (sen)

0

2

3

1

4

5

6

2011 2012 2013 2014 2015

sen

Year

5.0 5.0 5.0

4.04.5

Gross Dividend Per Share (sen)

0

5

10

15

20

2011 2012 2013 2014 2015

RM

(mill

ion)

Year

16

9 10 11

19

Profit Before Tax

220

230

235

225

240

245

250

255

2011 2012 2013 2014 2015

RM

(mill

ion)

Year

232

249

241

251

244

Total Assets

FIVE-YEAR GROUP FINANCIAL SUMMARY


Annual Report 201510

CHAIRMAN'S STATEMENT

On behalf of the Board of Directors, I am pleased to present to you the Group’s Annual Report and Audited Financial Statements for the financial year ended 30th June, 2015.

FINANCIAL PERFORMANCE

For the financial year ended 30th June, 2015, the Group recorded a marginally higher revenue of RM150.18 million as compared to RM145.34 million in the previous financial year. However, profit before tax rose to RM19.36 million as compared to RM10.75 million in the previous year, a substantial improvement of 80.1%. Earnings before interest, tax, depreciation and amortisation (EBITDA) improved by 46.9% from RM16.26 million to RM23.89 million in the current reporting financial year.

As a result earnings per share improved from 4 sen per share to 7 sen per share. Net tangible assets per share also improved from 106 sen to 108 sen.

At the Company level, Hexza Corporation Berhad recorded a revenue of RM10.54 million compared to a revenue of RM9.20 million in the previous year. Profit before tax for year ended 30th June, 2015 amounted to RM11.35 million as compared to RM10.26 million in the previous year. Earnings before interest, tax, depreciation and amortisation amounted to RM11.36 million as compared to RM10.27 million in the previous year.

REVIEw OF OPERATIONS

In tandem with the Malaysian Gross Domestic Product growth of 6%, the manufacturing segment in the reporting year continued to show improvement, resulting in an improved turnover of RM146.86 million compared to RM142.53 million in 2014, in spite of a stuttering performance from Norsechem Resins Sdn. Berhad.

Manufacturing profit before tax improved by 123.2% to RM15.38 million from RM6.89 million in the previous year.

The performance of the major operating subsidiaries are indicated below:-

HEXzACHEM SARAwAK SDN. BHD. (HCS)

HCS was the largest contributor to the Group’s turnover and profits. Turnover improved marginally from RM67.28 million to RM69.70 million. However, profit before tax improved substantially from RM3.34 million to RM10.38 million, contributed by improved productivity and significantly better performance in the purchasing department.

CHEMICAL INDUSTRIES (MALAYA) SDN. BHD. (CIM)

Turnover improved by 20.5% from RM47.83 million to RM57.62 million. Profit before tax improved by 34.5% from RM4.70 million to RM6.32 million. The improvement in profits was contributed by a combination of higher production yield and higher sales.

NORSECHEM RESINS SDN. BERHAD (NRSB)

Turnover of RM19.28 million was significantly lower than the RM27.09 million achieved in the previous year, a reduction of 28.8%.

Sales volume was reduced by 23.4%, indicating a lower selling price per unit volume sold. There is a substantial over-capacity in the production of formaldehyde resins in Semenanjung Malaysia and in recent years, this over-capacity has been aggravated by big users of formaldehyde resins acquiring and operating their own resins plants creating what is known in the trade as “captive markets”.



CHAIRMAN'S STATEMENT

Loss before tax of RM1.37 million was slightly higher compared to the loss of RM1.28 million in the previous year. This annual loss is the fifth consecutive year of operational loss incurred by NRSB and resulted in the Board’s decision to terminate the production and sale of formaldehyde resins by NRSB. More details concerning this decision can be found later in this report under Subsequent Event.

BIO-ACETIC PRODUCTS SDN. BHD.

Bio-Acetic Products Sdn Bhd. experienced a substantial drop in offtake from a major customer and as a result produced a reduced profit of approximately RM79,000, a drop of 53% compared to the previous year.

HIGHLIGHTS OF THE YEAR

The Company had on 30th January, 2015 entered into a Sale & Purchase and Leaseback Agreement of equipment of US$6.0 million with Tembusu Industries Pte Ltd. (Tembusu), which is incorporated in Singapore. The equipment was for a 8MW Heavy Fuel Oil Power Generation System in Kawthaung, Myanmar. Tembusu will lease back the equipment from Hexza for a period of 10 years. The lease period commenced on 1st July, 2015 and the monthly rental is at US$130,205 payable in arrears on a quarterly basis. Based on an initial investment of US$6.0 million the expected IRR works out to be approximately 22%. We expect this investment to contribute positively to the earnings of the Group commencing Financial Year 2016 for ten years.

SUBSEqUENT EVENT

On 8th July, 2015, Norsechem Resins Sdn. Berhad (NRSB) had entered into a Sale & Purchase Agreement with Crystal Dignity (M) Sdn. Bhd., for the sale of its leasehold industrial land and buildings (not including the Formox plant and the resins plant) for a consideration of RM17.0 million.

NRSB has been incurring losses for a number of years. Efforts in the past years to turnaround NRSB were not successful. As stated earlier, the formaldehyde resins industry in Semenanjung Malaysia is highly competitive and challenging due to gross over-capacity and a dwindling market aggravated by so-called “Captive Markets” as a result of “vertical integration” by big end-users of formaldehyde resins.

Your Board, having taking into consideration all aspects of NRSB’s operation including the expected future viability, prospects for growth and profitability, decided it is in the best interest of Hexza Group to discontinue the business operations of NRSB on 31st August, 2015.

CORPORATE SOCIAL RESPONSIBILITY

While we strive to enhance the return to our shareholders, we also recognize our social responsibility to our employees, business associates and the communities within which we operate.

In the recent retrenchment exercise arising from the termination of business of Norsechem Resins Sdn. Berhad the benefits granted to the retrenched employees exceeded what are mandated under the Employment Act of 1955.

The Group continues to nurture its human capital with skills and intellectual development by various training and workshops. Group subsidiaries continue to provide internship to undergraduates from various institutions of higher learning.

All our manufacturing subsidiaries are accredited with ISO 9001:2008 Quality Management Systems certification. The Group continuously pursue to improve the quality of its products to meet the challenges in the market. It is our policy to disclose information to stakeholders fairly and in a timely manner.



CHAIRMAN'S STATEMENT (continued)

Hexza recognizes that without being socially and environmentally responsible, it is impossible to have economically sustainable operations in the long term. Corporate Social Responsibility and Sustainability are important components of long term business success. For Hexza, Corporate Social Responsibility is about having a sustainable business strategy in the face of local and global challenges. It is also about conducting business with a conscience, caring for its employees, the community, the environment, its customers, its shareholders and all stakeholders. Hexza’s Corporate Social Responsibility mission is for all our Directors, Senior Executives, Management and staff to be community players in the promotion of a caring and civil society.

DIVIDEND

The Board of Directors is pleased to recommend a first and final single-tier dividend of 4.5 sen per share or 9.0% in respect of the financial year ended 30th June, 2015 which is subject to the approval of the shareholders at the forthcoming Annual General Meeting. The proposed dividend represents an increase of 12.5% over the dividend paid in respect of the previous year. The dividend in respect of the previous financial year of 4.0 sen per share or 8.0% was paid on 10th December, 2014.

The recommended dividend payout represents a distribution of approximately 80% of the net profit attributable to the shareholders of the Company. The payout ratio is about the same as the previous financial year, which was also about 80%. The dividend payment as a percentage of Group profits attributable to shareholders is 64.3% for the reporting financial year compared to 99.2% in the previous year. It is the aim of the Directors to maintain a policy of stable dividend payout to the shareholders.

OUTLOOK AND PROSPECTS

The economic outlook for the current financial year is quite challenging. “China’s Woes Echo Across Asia” was headlined by The Wall Street Journal in a recent front page article. China’s recent devaluation of its Yuan creates additional pressure on an already “battered” Ringgit. The U.S. Federal Reserve’s decision to keep interest rate unchanged after the September F.O.M.C meeting provides a short term relief before the rate is increased some time this year according to many financial pundits.

The weakening of the Ringgit against US$ poses serious challenges to Malaysian Manufacturers like our Group, as most of our major raw materials are imported. Local producers of raw materials should allocate the greater portion of their products for local manufacturers who can provide significant added value in the finished products. In Hexza’s case we can produce additional taxes in the form of excise duty for our potable ethanol.

With the cessation of the loss making subsidiary and the contributions from the investment of lease equipment in the Power Generation System in Myanmar, we are cautiously confident that the financial results for the FY 2016 will approximate if not better than the financial year just ended.

APPRECIATION

On behalf of my fellow Directors, I would like to express our sincere appreciation and thanks to all our stakeholders-shareholders, business associates, suppliers, employees and our valued customers for their loyal support and understanding.

Last but not least, I wish to express my heartfelt thanks to my fellow Directors of the Company and its subsidiaries for their advice and guidance and the management and staff for their dedication, diligence and commitment to continuous improvement and problem solving resulting in creditable performance under the challenging conditions.

Datuk Dr. Foong Weng SumChairman & Group Chief Executive

30th September, 2015



DIRECTORS’ PROFILE

DATUK DR. FOONG wENG SUMChairman & Group Chief Executive

Datuk Dr. Foong Weng Sum, aged 76, was appointed to the Board on 7th May 1982 as Vice Chairman. On 23rd

October 1986, he also assumed the position of Group Chief Executive. He took over as Chairman of the Board on 1st December 2000. He is also a member of the Remuneration Committee.

Datuk Dr. Foong Weng Sum is a graduate in medicine from University of London’s Guy’s Hospital Medical School. He has considerable business experience in various business sectors, including manufacturing, property development, financial management and investment.

DATO’ RICHARD ONG GUAN SENGDeputy Chairman/Independent Non-Executive Director

Dato’ Richard Ong, aged 77, was appointed to the Board on 25th March 1994 and he was appointed as the Deputy Chairman of the Board on 8th November 2011. He is also the Chairman of the Audit Committee and Nominating Committee and a member of the Remuneration Committee.

Dato’ Richard Ong is a member of the Malaysian Institute of Accountants, the Malaysian Institute of Certified Public Accountants and the Institute of Chartered Accountants in Australia. He became a Partner of Peat Marwick (now known as KPMG), Malaysia in 1971 and was appointed Deputy Senior Partner in 1989 until he retired in 1993. He is also on the Board of The Tan Sri Tan Foundation and holds directorships in several private limited companies.

DR. FOONG wENG CHEONGNon-Independent Non-Executive Director

Dr. Foong Weng Cheong, aged 82, was appointed to the Board on 7th May 1982. He is also a member of the Audit Committee, Remuneration Committee and Nominating Committee.

Dr. Foong Weng Cheong is a graduate in medicine from the University of Melbourne, Australia and is a Fellow of the Royal College of Surgeons of Edinburgh and also a Fellow of the Royal College of Surgeons of England. He was appointed Senior Lecturer (1971-1972), Associate Professor (1973 -1980) and Professor & Head of Department of Surgery (1981-1988) at the National University of Singapore and Chief of University Department of Surgery at Singapore General Hospital and National University Hospital until he retired in 1988. Since 1988 he is a Consultant Surgeon at Mount Elizabeth Medical Centre, Singapore.

MR. LEONG KENG YUENIndependent Non-Executive Director

Mr. Leong Keng Yuen, aged 65, was appointed to the Board on 15th September 2000. He is also the Chairman of the Remuneration Committee and a member of the Audit Committee and Nominating Committee.

Mr. Leong Keng Yuen was a partner of Ernst & Young Malaysia before retiring at the end of 2005. He is a member of the Malaysian Institute of Accountants and a Fellow of the Association of Chartered Certified Accountants. He also holds a Master of Science in Management from the Massachusetts Institute of Technology U.S.A. and a Bachelor of Engineering (First Class Honours) from University of Queensland, Australia. He is also a Non-Executive Director of OSK Ventures International Berhad, company listed on Bursa Malaysia. He is also on the Board of Datin Seri Ting Sui Ngit Foundation and The Perak Chinese Welfare Association.



DIRECTORS’ PROFILE (continued)

TUAN HAjI MOHD jALI @ MOHD jALIL BIN SANYIndependent Non-Executive Director

Tuan Haji Mohd Jalil Sany, aged 68, was appointed to the Board on 20th November 2000.

He is a member of the Malaysian Institute of Accountants and a Fellow of the Association of Chartered Certified Accountants. In 1987 he attended an advanced Management Programme at Insead, Fontainebleu, France.

He has over 40 years of working experience in diversified industries which includes unit trust and investment holdings, properties and hotels, banking and insurance, plantation, film distribution and exhibition, commercial agriculture, animal husbandry and book publication and distribution. In that 40 years period, he has contributed over more than 20 years in the industrial development of both the states of Sabah and Sarawak through holding various key positions as Chief Financial Officer, Chief Operating Officer and directors in investment and business organizations. He now holds directorships in several private limited companies.

MR. OOI YING HONGIndependent Non-Executive Director

Mr. Ooi Ying Hong, aged 49, was appointed to the Board on 12th July 2011. He is also a member of the Audit Committee.

He holds a Bachelor of Business (Accounting) degree from University of Southern Queensland, Australia.

He started his career in auditing with KPMG and subsequently joined Matsushita Television Co. (M) Sdn. Bhd. He has many years of experience in various industries, including logistics, international trading, information technology, service and automotive. He also sits on the Board of Directors of various private limited companies.

OTHER INFORMATION

NationalityAll the Directors are Malaysians.

Family relationship with any Director and/or substantial shareholderDr. Foong Weng Cheong and Datuk Dr. Foong Weng Sum are brothers. Apart from this, none of the Directors has any family relationship with the other Directors or substantial shareholders of the Company.

Conflict of interestSave as disclosed in Note 20 under Notes to the Financial Statements, none of the Directors has any conflict of interest with the Company.

Convictions for offencesNone of the Directors has been convicted of any offence within the past ten years.



AUDIT COMMITTEE REPORT

The Board of Directors (“the Board”) is pleased to present the report of the Audit Committee for the financial year ended 30th June 2015.

COMPOSITION

The Audit Committee comprises four members, three Independent Non-Executive Directors and one Non-Independent Non-Executive Director. During the financial year ended 30th June 2015, four (4) Audit Committee meetings were held and the details of the attendance were as follows:

No. of Meetings Attended

Dato' Richard Ong Guan Seng(Chairman, Independent Non-Executive Director)

4 out of 4

Mr. Leong Keng Yuen(Member, Independent Non-Executive Director)

4 out of 4

Dr. Foong Weng Cheong(Member, Non-Independent Non-Executive Director)

4 out of 4

Mr. Ooi Ying Hong(Member, Independent Non-Executive Director)

4 out of 4

The Company Secretary attended all the meetings of the Audit Committee held during the financial year. Other members of the Board and employees also attended the meetings upon the invitation of the Committee.

The detailed profiles of all the members of the Audit Committee are shown in the Board of Directors’ profile.

TERMS OF REFERENCE

The terms of reference of the Audit Committee are as follows:

1. Membership

(a) The Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist of not less than three members of whom all the members must be Non-Executive Directors, with a majority of them being Independent Directors. At least one member of the Committee must be a member of the Malaysian Institute of Accountants or eligible for membership.

(b) The members of the Committee shall select a Chairman from among their numbers who shall be an Independent Director.

(c) The term of office and performance of the Committee and each of its members should be reviewed by the Board at least once every three years to determine whether such Audit Committee and members have carried out their duties in accordance with their terms of reference.

2. Authority

The Audit Committee shall, in accordance with a procedure to be determined by the Board of Directors and at the cost of the Company:

(a) have authority to investigate any matter within its terms of reference;

(b) have the resources which are required to perform its duties;

(c) have full and unrestricted access to any information pertaining to the Company;

(d) have direct communication channels with the external auditors and the person(s) carrying out the internal audit function or activity;

(e) be able to obtain independent professional or other advice; and

(f) be able to convene meetings with the external auditors, internal auditors or both, excluding the attendance of the management, whenever deemed necessary.



AUDIT COMMITTEE REPORT

3. Duties and Responsibilities

The functions of the Audit Committee shall be to:- (a) review with the external auditors, their audit plans; (b) review with the external auditors, their evaluation of the system of internal controls; (c) review with the external auditors, their audit reports; (d) review the assistance given by the Company’s employees to the external auditors and meet the external

auditors in the absence of management at least twice a year; (e) review the adequacy of the scope, functions, competency and resources of the internal audit functions and

that it has the necessary authority to carry out its work; (f) review the scope and results of the internal audit procedures; (g) review the risk management function of the Group and the Risk Management Units’ assessment reports; (h) review the Group’s quarterly results and year end financial statements, prior to the approval by the Board of

Directors, focusing particularly on: (i) changes in or implementation of major accounting policy changes; (ii) significant and unusual events; and (iii) compliance with accounting standards and other legal requirements. (i) review any related party transactions that may arise within the Company or Group; (j) recommend the appointment of external auditors, audit fee and any question of resignation or dismissal;

including a formal evaluation of the external auditors at least once a year; (k) consider the appointment of the head of the Internal Audit Unit and his/her remuneration; (l) report to the Board of Directors on compliance with laws and regulations, related party transactions, code

of ethics, significant results and findings from internal and external audit, internal control, corporate governance and risk management function; and

(m) undertake such other functions as may be agreed to by the Audit Committee and Board of Directors.

4. Meetings

(a) The Audit Committee shall meet not less than four (4) times a year. (b) The quorum of the Committee shall be at least two members; the majority of members present must be

independent directors. (c) The Secretary to the Committee shall be the Company Secretary.

5. Reporting Procedures

The Secretary shall circulate the minutes of meetings of the Committee to all members of the Board.

6. Documentation Procedures

The Secretary shall be responsible, in conjunction with the Chairman, for drawing up the Agenda and the notice of meeting. The notice of meeting and the Agenda together with the relevant papers are distributed to the members at least three (3) days prior to each meeting. The minutes of the Audit Committee meetings are also distributed to all Board members. The Secretary is responsible for keeping the minutes and responsible for communicating the decisions made at the meeting to the relevant parties.

SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR

During the financial year ended 30th June 2015, in line with the terms of reference, the Audit Committee carried out the following activities in discharge of its duties and responsibilities:

(a) Financial results (i) Reviewed the Group’s quarterly results announcements to Bursa Malaysia Securities Berhad before

recommending them to the Board of Directors for approval. (ii) Reviewed the audited financial statements of the Company and of the Group with the External Auditors to

ensure compliance with the provisions of the Companies Act, 1965 and the applicable accounting standards prior to submission to the Board of Directors for consideration and approval.



(b) External Audit (i) Reviewed the scope of work and the audit plan of the External Auditors in respect of the audit for financial

year ended 30th June 2015.

(ii) Reviewed with the External Auditors the results of the audit and management’s responses to their audit findings, including corrective actions taken by the management on outstanding audit issues highlighted in the previous audit.

(iii) Reviewed the audit fee for the financial year.

(iv) Met twice with the External Auditors during the year without the presence of management including the Group Chief Executive and the Company Secretary.

(v) Reviewed and evaluated the performance of the External Auditors and made recommendations to the Board on their re-appointment.

(c) Internal Audit (i) Reviewed and approved the internal audit plan, including the scopes and audit approach.

(ii) Reviewed and deliberated on the reports from the Internal Audit Unit and management’s response to the recommendations and presented the reports to the Board of Directors.

(iii) Reviewed the performance of the Internal Audit Unit against the annual audit plan for the financial year ended 30th June 2015 and the costs incurred in connection with the performance of the audits during the year.

(d) Risk Management (i) Reviewed and deliberated on the risk assessment reports from the operating companies of the Group with

requests for further actions where appropriate.

INTERNAL AUDIT FUNCTION

The Company has an in-house Internal Audit Unit which provides support to the Audit Committee in discharging its duties and responsibilities. The functions and responsibilities of the Internal Audit Unit are embodied in the Internal Audit Charter. The main role of the Internal Audit Unit is to undertake independent assessments of the adequacy and effectiveness of the Group’s system of internal control, compliance with operational procedures and risk management procedures. The Internal Audit Unit reports directly to the Chairman of the Audit Committee.

During the financial year under review, the Internal Audit Unit conducted audits on operating subsidiaries based on the internal audit plan approved by the Audit Committee. The total cost incurred by the Internal Audit Unit during the financial year ended 30th June 2015 amounted to approximately RM93,000. The following were the activities carried out by the Internal Audit Unit:

(i) Prepared internal audit plan for the approval of the Audit Committee.

(ii) Reviewed and appraised the adequacy, effectiveness and efficiency of internal control in the Group.

(iii) Ascertained the extent to which the companies within the Group comply with established policies, procedures and statutory requirements.

(iv) Reviewed the effectiveness of the risk management system.

(v) Followed up on matters from previous internal audit report to ensure corrective measures have been undertaken by management.

(vi) Performed special audits upon the request of management.

(vii) Prepared Internal Audit reports on audit findings and recommendations for improvements to the existing system of internal control and work procedures/processes.

(viii) Prepared quarterly reports and update the Audit Committee on progress of internal audit work at Audit Committee meetings.

AUDIT COMMITTEE REPORT (continued)



CORPORATE GOVERNANCE STATEMENT

The Board of Directors (“the Board”) is pleased to set out in this statement the manner and extent in which the principles and recommendations as outlined in the Malaysian Code on Corporate Governance 2012 (“the Code”) were applied throughout the financial year ended 30th June 2015. This statement is made in accordance with a resolution of the Board of Directors dated 30th September 2015.

1. ESTABLISHED CLEAR ROLES AND RESPONSIBILITIES

Principal Roles The Board is responsible for the corporate governance practices of the Group. It guides and monitors the affairs of the Group on behalf of the shareholders and retains full and effective control over the Group. The key responsibilities include the primary responsibilities recommended by the Code. These cover a review of the strategic direction for the Group, setting out short term and long term plans, overseeing the business operations of the Group, and evaluating whether these are being properly and effectively managed.

Board Composition and Balance The Board currently has six (6) members, comprising four (4) Independent Directors, one (1) Non-Independent Non-Executive Director and one (1) Executive Director. This complies with the Listing Requirements of Bursa Malaysia Securities Berhad ("Bursa Securities") that one third of its Board consists of Independent Directors. The presence of four (4) Independent Directors fulfills an important role in corporate accountability. The role of the Independent Directors is particularly important as they provide independent and unbiased views, advice and judgment.

The Board comprises a mixture of businessmen and professionals. The current composition of the Board brings the required mix of skills and experience required for the Board to function effectively. A brief write-up of the background of the Board members as at the date of this statement is set out in the Directors’ profile section of this Annual Report.

Roles and Responsibilities The roles of the Chairman and the Group Chief Executive are combined and are currently held by Datuk Dr. Foong Weng Sum. The Board is mindful of the combined roles which is not in line with the recommendation of the Code but is of the view that there are a majority of Independent Directors who are professionals of credibility and repute who demonstrate independence of judgment and objectivity in the Board’s deliberations and provide the necessary check and balance so as to safeguard the interests of minority shareholders. Efforts are being made to split up the role by identifying suitable candidates for the Group Chief Executive.

The Board had delegated the management of the Group to the Group Chief Executive and his management team. The Group Chief Executive is responsible for implementing the policies and decisions of the Board, overseeing the day to day operations as well as coordinating the development and implementation of business and corporate strategies. The Non-Executive Directors contribute significantly in areas such as policy and strategy, performance monitoring, allocation of resources as well as improving governance and controls.

The Board of Directors regularly review the strategic direction of the Company and the progress of the Group’s operations taking into account the changes in business environment and risk factors.




Board Charter and Code of Ethics The Board has adopted a Board Charter which sets out the role, functions, composition, operations and processes of the Board. The Charter provides guidance to the Board in relation to the Board’s role, duties and responsibilities and authority.

The Directors have also approved a Code of Conduct for Directors and employees which governs the standards of ethics and good conduct expected of Directors and employees. The Code of Conduct includes principles relating to fair dealings, confidentiality of information, conflict of interest, compliance with laws and regulations and sexual harassment. In addition, the Group’s Whistle-Blowing Policy and Procedures provide an avenue for stakeholders to report concerns about malpractices, unethical behaviour, misconduct or failure to comply with regulatory requirements without fear of reprisal.

The Board will review the Board Charter regularly to ensure it remains consistent with the Board’s objectives and responsibilities.

The Board Charter and the Code of Ethics are posted in our website at www. hexza.com.my

Supply of Information The Board has unrestricted access to timely and accurate information, necessary in the furtherance of their duties. The Chairman ensures that all relevant issues requiring the Board’s deliberation and approval are on the agenda and senior management is invited to the Board meetings to present the relevant issues. The Agenda and a full set of Board papers are distributed at least three (3) days prior to the Board meeting to allow Directors sufficient time to review the Board papers for effective deliberation at the meeting proper. All proceedings of Board meetings are minuted and signed by the Chairman. All Directors have access to the advice and services of the Company Secretary and senior management in carrying out their duties.

There is a formal procedure sanctioned by the Board for Directors, whether as a full Board or in their individual capacity, to take independent professional advice at the Group’s expense, where necessary in furtherance of their duties.

Appointment to the Board The Board has established a Nominating Committee, consisting of three (3) Non-Executive Directors. The Committee is responsible for the appointment of new Directors to the Board. The Committee reviews the required mix of skills and experience of the Directors of the Board and determines the appropriate Board balance and number of Non-Executive Directors. The Committee has established the procedures and processes towards an annual assessment of the effectiveness of the Board as a whole and the contribution of each individual Director.

The Board is supportive of gender diversity in the boardroom as recommended by the Code; the Board will ensure that gender diversity will be taken into consideration in nominating and selecting new Directors for appointment on the Board.

Corporate Social Responsibility (CSR) The Board of Directors is mindful of its corporate social responsibility commitments to its various stakeholders and endeavors to operate ethically, paying attention to environmental, social and governance aspects of business. The Group’s mission is to enhance value for all stakeholders whilst taking into consideration our continued social obligations. The Group is mindful of its social responsibilities and will continue to support its CSR activities.



CORPORATE GOVERNANCE STATEMENT (continued)

2. STRENGTHEN COMPOSITION

The Company strives to have a balanced Board comprising members with suitable qualifications, skills, expertise and exposures.

Board Committees The Board has established the following Committees to assist the Board to discharge its fiduciary duties:

(a) Audit Committee

The Audit Committee comprises three (3) Independent Directors and one (1) Non-Independent Non-Executive Director.

A full report of the Audit Committee with details of its membership, terms of reference and a summary of the activities during the financial year are set out in the Audit Committee Report of this Annual Report.

(b) Nominating Committee

The membership of the Nominating Committee comprises exclusively Non-Executive Directors as follows:

1. Dato’ Richard Ong Guan Seng, Chairman (Independent Non-Executive Director) 2. Mr. Leong Keng Yuen, member (Independent Non-Executive Director) 3. Dr. Foong Weng Cheong, member (Non-Independent Non-Executive Director)

The role of the Nominating Committee, set out in its terms of reference, includes among others, the following:

(i) To identify, assess, consider and recommend suitable candidates for directorship.

(ii) To determine the appropriate Board balance and number of Non-Executive Directors.

(iii) To review annually the required mix of skills, experience and other qualities, including the contributions each of the Directors bring to the Board.

(iv) To assess annually the effectiveness of the Board as a whole, including its size, and composition and the Committees of the Board.

(v) To review the training needs of the Directors.

The Nominating Committee had two (2) meetings in the financial year under review and all the members attended the meetings.

The Nominating Committee carried out the following activities during the financial year ended 30th June 2015:

(i) Reviewed the Terms of Reference of the Committee to include its responsibilities under the Code.

(ii) Reviewed and assessed the Board balance and composition of the Directors, the Directors’ contribution and the effectiveness of the Board as a whole.

(iii) Reviewed the performance of the Audit Committee, Nominating Committee and the Remuneration Committee.

(iv) Reviewed succession planning of the Chief Executive Officer and senior executives.

(v) Reviewed the training attended by the Directors.

(vi) Reviewed the re-election of Directors retiring at the next Annual General Meeting of the Company.

(vii) Assessed the independence of the Independent Directors.

(viii) Assessed, justified and made recommendation to the Board for the retention of Independent Directors who have exceeded a cumulative term of nine (9) years.

All assessments and evaluations carried out by the Nominating Committee in discharging its functions have been properly documented.




(c) Remuneration Committee

The Remuneration Committee comprises a majority of Non-Executive Directors as follows:

1. Mr. Leong Keng Yuen, Chairman (Independent Non-Executive Director) 2. Datuk Dr. Foong Weng Sum, member (Executive Director) 3. Dato’ Richard Ong Guan Seng, member (Independent Non-Executive Director) 4. Dr. Foong Weng Cheong, member (Non-Independent Non-Executive Director)

The Remuneration Committee is responsible for recommending the remuneration package for all Directors. The individual Directors play no part in deciding their own remuneration.

The policy practised on Directors’ remuneration by the Remuneration Committee is to provide the remuneration packages according to the skills, level of responsibilities, experience and performance of the Directors in order to attract, retain and motivate Directors of the quality required to lead and guide the business direction of the Company.

The remuneration of the Non-Executive Directors is determined by the Board as a whole. In addition, Non-Executive Directors are paid a meeting allowance for each meeting attended.

The Remuneration Committee had one (1) meeting during the financial year under review and all the committee members attended the meeting.

Directors’ Remuneration

The details of the Directors’ remuneration (including benefits-in-kind) from the Group for the financial year ended 30th June 2015 are as follows:

RM’000 Salary Fees BonusOther

EmolumentsBenefits-in-kind Total

Executive Director

Datuk Dr. Foong Weng Sum 900 86 150 5 10 1,151

Non-Executive Directors

Dr. Foong Weng Cheong - 74 - 19 - 93Dato’ Richard Ong Guan Seng - 58 - 19 - 77Mr. Leong Keng Yuen - 71 - 19 - 90Tuan Haji Mohd Jali @ Mohd Jalil Bin Sany - 52 - 5 - 57Mr. Ooi Ying Hong - 67 - 15 - 82

Total 900 408 150 82 10 1,550

The number of Directors whose remuneration (including benefits-in-kind) falls into the following bands is as follows:

Band Executive Director Non-Executive DirectorsRM50,001 to RM100,000 - 5RM1,150,001 to RM1,200,000 1 -

The fees payable to the Directors by the Company will be recommended by the Board for approval by shareholders at the forthcoming Annual General Meeting scheduled to be held on 20th November 2015.

Currently, there is no contract of service between any Director and the Company or its subsidiaries.




3. REINFORCE INDEPENDENCE

The Board consists of five Non-Executive Directors, four of them are Independent Directors and they are able to express their independent views without any constraint. The Independent Directors remain objective and independent in decision making, actively participated at meetings of the Board and Board Committees and provided constructive feedback. Three of the four Independent Directors, Dato’ Richard Ong Guan Seng, Mr. Leong Keng Yuen and Tuan Haji Mohd Jali @ Mohd Jalil Bin Sany had served the Company for a cumulative term of more than 9 years, exceeding the 9 years as per the recommendations of the Code. The Company believes that the length of the service does not in any way interfere with their exercise of independent judgement to act in the interest of the Company.

The Board through the Nominating Committee has reviewed the performance of the Independent Directors for the financial year ended 30th June 2015 and is satisfied that the Independent Directors have been able to discharge their responsibilities in an independent manner. The criteria used in the assessment of Independent Directors include the following:

• Integrity• Independence from management • Absence of conflict of interest• Contribution to Board’s deliberation

The Company does not have term limits for independent directors. However, in line with the recommendation of the Code, the Company follows the guidelines which provide a limit of a cumulative term of nine (9) years on the tenure of the independent directors unless extended by shareholders. The Board has received and reviewed the duly signed declaration forms from these Directors to confirm their independence based on the criteria in line with the definition of “Independent Directors” prescribed by the Listing Requirements. The Company will be seeking shareholders’ approval to retain the following Independent Directors, Dato’ Richard Ong Guan Seng, Mr. Leong Keng Yuen and Tuan Haji Mohd Jali @ Mohd Jalil Bin Sany who have served the Company as Directors of the Company for a cumulative term of more than nine (9) years based on the following justifications:

1. They have fulfilled the criteria under the definition of Independent Director pursuant to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

2. They each remain independent and actively participate in board discussions and provide an independent and objective voice on the Board.

3. They have in depth knowledge of the Company’s business operations and they are committed to devote sufficient time and attention to the Company.

4. They act in the best interest of all shareholders and will provide the check and balance to the Board.

Re-election of Directors

In accordance with the Company’s Articles of Association, all newly appointed Directors are subject to re-election by shareholders at the first annual general meeting immediately after their appointment. The other Directors are subject to retire on a rotational basis once every three years and are entitled to offer themselves for re-election at the Company’s Annual General Meeting. Directors over seventy years old are required to submit themselves for re-appointment annually in accordance to Section 129(6), Companies Act, 1965. Directors standing for re-election at the Forty-sixth Annual General Meeting are detailed in the Notice of the Forty-sixth Annual General Meeting.

The Directors who are due for re-election and/or re-appointment at the Annual General Meeting are assessed by the Nominating Committee and then recommendation made to the Board for endorsement to seek shareholders’ approval for the re-election and/or appointment as Directors of the Company.

4. FOSTER COMMITMENT

Each Director does not hold more than five directorships in public listed companies to ensure that they have sufficient time to focus and discharge their duties and responsibilities. The Board is satisfied with the level of the time commitment given by the Non-Executive Directors toward fulfilling their roles and responsibilities as Directors of the Company during the financial year ended 30th June 2015.




Board meetings The Board meets at least four (4) times a year at quarterly intervals, with additional meetings convened as necessary. There were six (6) meetings held during the financial year ended 30th June 2015 and details of the attendance of the Directors were as follows:

No. of Meetings Attended

Datuk Dr. Foong Weng Sum 6/6Dato' Richard Ong Guan Seng 6/6Dr. Foong Weng Cheong 6/6Mr. Leong Keng Yuen 5/6Tuan Haji Mohd Jali @ Mohd Jalil Bin Sany 5/6Mr. Ooi Ying Hong 6/6

Directors’ Training

The Directors continue to undergo training on an annual basis to further enhance their skills and knowledge so as to keep abreast with new regulatory developments and the Listing Requirements. The Nominating Committee will review and determine the training needs of the Directors. The Directors are also encouraged to attend various training on their own and submit the certificate of attendance to the Secretary for record.

The following were the details of training attended by the Directors during the financial year ended 30th June 2015:

Name of Directors Training AttendedDatuk Dr. Foong Weng Sum Pronto GST Implementation Awareness Training

Budget 2015 Tax Seminar Driving Corporate Performance in 2015

Dato' Richard Ong Guan Seng Enhance Internal Audit Practice Lead the Change: Getting Women on Boards Driving Corporate Performance in 2015

Dr. Foong Weng Cheong Driving Corporate Performance in 2015

Mr. Leong Keng Yuen Transfer Pricing From A Legal Perspective EY 2015 Tax Seminar Seeing Eye to Eye Seminar Audit Oversight Board Conversation with Audit Committees Driving Corporate Performance in 2015 Risk Management & Internal Control Overview of Selected MFRSs and latest update

Tuan Haji Mohd Jali @ Mohd Jalil Bin Sany

Audit Committees – Increased Expectations

Mr. Ooi Ying Hong Driving Corporate Performance in 2015

The Company Secretary circulated from time to time the relevant guidelines on statutory and regulatory requirements to the Directors. The External Auditors also highlighted changes to the Malaysian Financial Reporting Standards and legislation that affect the Company’s financial statements during the financial year.



5. UPHOLD INTEGRITY IN FINANCIAL REPORTING

Financial Reporting

The Board aims to present a balanced and meaningful assessment of the Group’s financial performance and prospects in presenting the annual financial statements and quarterly announcement of results to shareholders as well as the Chairman’s statement and review of operations in the annual report. The Board is assisted by the Audit Committee to oversee the Group’s financial reporting processes and the quality of its financial reporting. The Audit Committee reviews the Group’s Annual and quarterly financial statements and the Group accounting policies to ensure that the Group’s financial reporting comply with accounting standards and regulatory requirements.

Internal Control

The Board continues to maintain and review its risk management system and internal control procedures to ensure that the Group is operating effectively and efficiently in accordance with its internal policies and procedures and complying with laws and regulations. The Statement on Risk Management and Internal Control which provides an overview of the state of risk management and internal controls of the Group is presented in this Annual Report.

Audit Committee

The Board is assisted by the Audit Committee in overseeing the Group’s financial reporting, risk management and internal control system. The composition, terms of reference and summary of the activities of the Audit Committee during the financial year are disclosed in the Audit Committee Report of this Annual Report.

Relationship with the Auditors

(a) Internal Audit The Group has an in-house Internal Audit Unit that assists the Audit Committee in the discharge of its duties and responsibilities. The Internal Audit Unit function includes evaluation of the processes by which significant risks are identified, assessed and managed. The audits are carried out to ensure instituted controls are appropriate, effectively applied and within acceptable risk exposures and consistent with the Group’s risk management policy. The Internal Audit Unit reports directly to the Audit Committee and audit findings and recommendations are communicated to the Board on a quarterly basis.

(b) External Audit The Company has established a transparent and appropriate relationship with the Group’s external auditors through the Audit Committee. It is the practice of the Audit Committee to meet the external auditors to discuss their audit plan, audit findings and the financial statements. The Audit Committee will have a private session with the external auditors without the presence of any executive of the Group at least twice a year.

The Audit Committee has performed evaluation and monitors the suitability and independence of the external auditors in accordance to a standard criteria adopted. The Company has also obtained assurance from the external auditors confirming that they are and have been independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements. To maintain independence, the Company supports the external auditors’ policy to change the lead engagement partner once every five years.

The external auditors are invited to attend the Annual General Meeting of the Company and are available to answer shareholders’ queries on the financial statements tabled at the AGM.

6. RECOGNISE AND MANAGE RISKS

The Board has established an enterprise risk management framework to manage risk. The Risk Management Unit of each operating company is headed by the respective General Manager who oversees and coordinates the overall risk management activities of the respective company. The Risk Management Units submit risk assessment reports to the Audit Committee on a half yearly basis.




The Group has an in-house Internal Audit Unit which reports directly to the Audit Committee. The Internal Audit Unit conducts regular reviews and appraisals of the effectiveness of the internal controls processes and risk management of the Group and reports the findings to the Audit Committee on a quarterly basis.

The Audit Committee reviews and evaluates the effectiveness of the internal control and risk management systems in the Group. The Board is provided with reasonable assurance from the Audit Committee on risk management and internal control system. Details of the risk management are stated in the Statement on Risk Management and Internal Control of this Annual Report.

7. ENSURE TIMELY AND HIGH qUALITY DISCLOSURE

The Board exercises close monitoring of all price sensitive information potentially required to be released to Bursa Securities and makes material announcements to Bursa Securities in a timely manner as required. All announcements for release to Bursa Securities are authorised by any two Directors or a Director and the Company Secretary of the Company. The Company Secretary is responsible to compile the information for the approval of the Board for release of such information to the market as stipulated by Bursa Securities.

As for the dealings in the Company’s shares, the Directors and senior management privy to price sensitive information are requested to observe the Listing Requirements on the provisions on dealing in the shares of the Company during the “closed period” as well as outside the “closed period”.

8. STRENGTHEN RELATIONSHIP BETwEEN COMPANY AND SHAREHOLDERS

Shareholders communication and investors relationship policy

The Annual General Meeting is the principal forum for dialogue and interaction with the shareholders of the Company. Shareholders are encouraged to attend the Company’s Annual General Meeting and use the opportunity to actively participate in the proceedings. They are encouraged to ask questions both about the resolutions being proposed or any issues pertaining to the Company and to give their views and suggestions for the benefit of the Company. Members of the Board and the external auditors of the Company are present to answer questions raised at the meeting. Where it is not possible to provide immediate answers, the Chairman will undertake to furnish the shareholder with a written answer after the Annual General Meeting.

The annual reports and the quarterly announcements are the primary modes of communication to report on the Group’s business, activities and financial performance to all its shareholders. Corporate information of the Group is available in the Company’s website, www.hexza.com.my.

Poll voting

The Board encourages poll voting for substantive resolutions as recommended by the Code. The Chairman will inform shareholders of their right to demand a poll vote at the commencement of the general meeting. Voting on resolutions at the Annual General Meeting shall be by way of show of hands unless a poll is demanded.

Dato’ Richard Ong Guan Seng, the Deputy Chairman is the Senior Independent Non-Executive Director who will attend to all queries relating to the affairs of the Group.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors are aware of its responsibility for ensuring that proper accounting records are kept and the accounts and other financial reports of the Company and the Group are prepared in accordance with the applicable approved accounting standards and complies with the provisions of the Companies Act, 1965.

The Directors are also responsible for taking reasonable steps as are reasonably available to them to control and safeguard the assets of the Group and to prevent and detect fraud and other irregularities. In the opinion of the Directors, the Group has applied the appropriate accounting policies and standards consistently in the preparation of the financial statements for the financial year ended 30th June 2015.

The Board is satisfied that during the financial year ended 30th June 2015, save for the exceptions highlighted, the Company is in compliance with the principles and recommendations of the Code.




Utilisation of Proceeds

No proceeds were raised by the Company from any corporate exercise during the financial year.

Share Buy-Back

There was no share buy-back during the financial year.

Options, warrants or Convertible Securities

There was no issue of options, warrants or convertible securities during the financial year.

American Depository Receipt (ADR) / Global Depository Receipt (GDR) Programmes

The Company did not sponsor any ADR or GDR programmes during the financial year.

Imposition of Sanctions / Penalties

There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the regulatory bodies during the financial year.

Non-Audit Fees

During the financial year ended 30th June 2015, the amount of non-audit fees payable for corporate tax compliance and other advisory services rendered to the Company and its subsidiaries by the Company’s auditors and its affiliates amounted to RM86,374.

Profit Estimate, Forecast or Projection

The Company did not release any profit estimate, forecast or projection for the financial year.

Profit Guarantee

The Company did not make any arrangement during the financial year which requires profit guarantee.

Material Contracts and Contracts Relating to Loans

There are no material contracts and contracts relating to loans entered into by the Company and its subsidiaries which involve the Directors and substantial shareholders entered into since the previous financial year.

Recurrent Related Party Transactions of Revenue Nature

The details of related party transactions of revenue or trading nature undertaken by the Company during financial year are disclosed in Note 20 to the Financial Statements.

ADDITIONAL COMPLIANCE INFORMATION



STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

The Board of Directors (“the Board”) is pleased to present the statement on risk management and internal control of the Group during the financial year ended 30th June 2015.

This statement is prepared in accordance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), Statement on Risk Management and Internal Control – Guidance for Directors of Public Listed Companies provided by Bursa Securities and the Malaysian Code on Corporate Governance 2012.

Board Responsibility

The Board recognizes its responsibility in maintaining a sound system of internal controls which includes not only financial controls but also operational and compliance controls as well as effective risk management. The Board has established on-going processes for identifying, evaluating and managing the significant risks that matters. The Board continually reviews the system to ensure it provides a reasonable but not absolute assurance against material misstatement of management and financial information and records or against financial losses or fraud.

The Board is of the view that the Group’s internal control and risk management framework is in place. The key features of the internal control systems are described under the following headings:-

1. Enterprise Risk Management Framework

The Board confirms that the Group continues to implement the methodologies in accordance with the enterprise risk management framework (“ERM”) approved by the Board. The framework ensures that there is an on-going process for identifying, evaluating, monitoring and managing risks that matters and affecting the Group’s business objective.

During the financial year under review, the Risk Management Units of the operating subsidiaries continued to coordinate the risk management activities of the respective subsidiaries. The Risk Management Units continued to identify principal risks of the business on an ongoing basis, assess and evaluate the likelihood and impact of the potential risk and manage the risks by formulating action plans to mitigate the risks. The Risk Registers are updated on a timely basis. Risk assessment reports are submitted on a half yearly basis by the respective operating companies to the Audit Committee for review. The Audit Committee in turn reports to the Board its assessment and recommendations.

The Board reviewed and monitored the significant risks that have an impact on the achievement of the Group’s business objectives through its assessment of the internal control system.

2. Internal Audit Function

The Group has an in-house Internal Audit Unit which reports directly to the Audit Committee. The Internal Audit Unit is responsible to monitor compliance with policies and procedures and assess the effectiveness of the internal control system, adequacy of existing risk action plans developed to manage the risks that matters and make recommendations to improve the system of internal control.

During the financial year under review, the Internal Audit Unit has carried out regular and systematic reviews on major business operating units of the Group to assess the effectiveness and adequacy of internal control and also on risk management and highlight areas for improvement. The annual audit plan has been reviewed and approved by the Audit Committee prior to the commencement of audit. Internal audit reports are issued upon completion of each audit which includes details on the audit objectives, scope, audit findings and recommendations and management’s response to the recommendations of the Internal Audit Unit. The Internal Audit Unit prepares quarterly reports to update the Audit Committee on the status of audits performed.

The Audit Committee ensures that control issues highlighted by both the Internal Audit Unit and the external auditors are appropriately addressed by the respective management of the operating subsidiaries on a timely basis.

The Board reviews the minutes of the Audit Committee meeting and is briefed by the Audit Committee Chairman on a quarterly basis.

3. Key Internal Control Processes

(a) Organisation Structure

• There is an appropriate organizational structure with well defined lines of responsibility and authority limits established for directors and management within the group in respect of day to day operations, investments, acquisition and disposal of property, plant and equipment.



STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (continued)

(b) Group Policies and Procedures

• Standard Enterprise Risk Management Policy & Procedures which outline the Group’s ERM Framework are in place to ensure clarity and consistency of risk management within the Group.

• Standard operational procedures, policies, guidelines and limits of approving authorities are documented in the Group Manual. The Group uses the same accounting system for all companies within the Group to ensure consistency in the financial reporting processes.

(c) Operational Monitoring and Controls

• The operating units hold regular management meetings to review the financial and operational performance and risk management issues.

• Executive Management Committee meetings are frequently held as and when necessary to monitor

and discuss on investments, projects, financial performance and legal matters.

• Annual business plans and budgets are prepared by the operating units and submitted to the Board for approval. The performance is compared against budget on a monthly basis with explanation of variances. The Board reviews the performance of the Group on a quarterly basis.

• Management reports, both financial and operational performance reviews which encompass review of key performance indicators, variance analysis and compliance to policies and guidelines are generated and submitted to the Group Chief Executive for review on a monthly basis.

• Half-yearly Risk Assessment reports are prepared by the operating subsidiaries to ensure risk management is carried out according to procedures.

• Yearly review of insurance coverage and its adequacy are carried out by senior management to ensure the assets are sufficiently covered against any mishap that may result in material losses to the Group.

• The Board meets at least on a quarterly basis and there is a formal agenda on matters for discussion at every meeting. The Group Chief Executive leads the presentation of board papers and provides comprehensive explanation of pertinent matters. The Board is updated on the performance of the operating units together with any significant matters by either the Group Chief Executive and/or the General Managers of the respective operating units at Board Meetings. Additional meetings are convened during the year to discuss on other specific matters which require the attention of the Board.

Review of the Statement by External Auditors

The external auditors have reviewed this Statement in accordance with the Recommended Practice Guide (“RPG”) 5 (Revised) issued by the Malaysia Institute of Accountants on the Review of Directors’ Statement on Risk Management and Internal Control pursuant to paragraph 15.23 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and reported to the Board that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in the review of the integrity of the system of risk management and internal control of the Group.

Conclusion

The Board has received assurance from the Group Chief Executive and Chief Financial Officer that to the best of their knowledge the risk management and internal control of the Group are operating effectively and adequately in all material respects, for the year under review up to the date of approval of this statement. The Board has appraised and confirmed the risk management and internal control system is satisfactory and the control issues highlighted by both internal and external auditors have not resulted in any material losses, contingencies or uncertainties that would require disclosure in this report.

This statement was reviewed and approved by the Board in accordance with a resolution of the Board of Directors dated 30th September 2015.

ANNUAL REPORT 2015


FINANCIALSTATEMENTS

Directors' Report

Independent Auditors’ Report

Statements of Profit or Lossand Other Comprehensive Income

Statements of Financial Position

Statements of Changes In Equity


Notes to the Financial Statements

Supplementary Information - disclosure on realised and unrealised profits or losses

Statement by Directors

Declaration by the Officer Primarily Responsiblefor the Financial Management of the Company

–––––––––––––––––––––––––––––––– 30 - 33

––––––––––––––––––––– 34 - 35

––––––––––––––– 36 - 37

–––––––––––––––––– 38 - 39

–––––––––––––––––– 40 - 41

––––––––––––––––––––––– 42 - 45

–––––––––––––––– 46 - 87

––––––– 88

––––––––––––––––––––––––––– 89

––– 89



DIRECTORS’ REPORT

The directors of HEXZA CORPORATION BERHAD have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended June 30, 2015.

PRINCIPAL ACTIVITIES

The Company is principally involved in investment holding.

The principal activities of the subsidiary companies are disclosed in Note 15 to the financial statements.

There have been no significant changes in the nature of the principal activities of the Company and its subsidiary companies during the financial year.

RESULTS OF OPERATIONS

The results of operations of the Group and of the Company for the financial year are as follows:

The GroupRM

The CompanyRM

Profit for the year 15,513,456 11,176,154

Profit attributable to:Owners of the Company 14,030,207 11,176,154Non-controlling interests 1,483,249 -

15,513,456 11,176,154

In the opinion of the directors, the results of operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

A first and final single-tier dividend of 8.0% in respect of 200,380,036 ordinary shares proposed in the previous financial year and dealt with in the previous directors’ report were paid by the Company during the financial year.

The directors have proposed a first and final single-tier dividend of 9.0% in respect of the current financial year. The proposed dividend is subject to approval by the shareholders at the forthcoming Annual General Meeting of the Company and has not been included as a liability in the financial statements.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.

ISSUE OF SHARES AND DEBENTURES

The Company has not issued any new shares or debentures during the financial year.



DIRECTORS’ REPORT

SHARE OPTIONS

No options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the Company. As of the end of the financial year, there were no unissued shares of the Company under options.

OTHER STATUTORY INFORMATION

Before the statements of profit or loss and other comprehensive income and the statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and had satisfied themselves that no known bad debts needed to be written off and that adequate allowance had been made for doubtful debts; and

(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been written down to their estimated realisable values.

At the date of this report, the directors are not aware of any circumstances:

(a) which would require the writing off of bad debts or render the amount of allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or

(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.

At the date of this report, there does not exist:

(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year and secures the liability of any other person; or

(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year. No contingent or other liability has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company for the financial year in which this report is made other than those disclosed in Note 29 to the financial statements.

DIRECTORS

The following directors served on the Board of the Company since the date of the last report:

Datuk Dr. Foong Weng SumDato’ Richard Ong Guan Seng Dr. Foong Weng CheongMr. Leong Keng Yuen Tuan Haji Mohd Jali @ Mohd Jalil Bin Sany Mr. Ooi Ying Hong

In accordance with Article 78 of the Company’s Articles of Association, Tuan Haji Mohd Jali @ Mohd Jalil Bin Sany retires by rotation and, being eligible, offers himself for re-election.



DIRECTORS (continued)

In accordance with Section 129 (6) of the Companies Act, 1965, Datuk Dr. Foong Weng Sum, Dato’ Richard Ong Guan Seng and Dr. Foong Weng Cheong retire at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment.

DIRECTORS' INTERESTS

The shareholdings in the Company of those who were directors at the end of the financial year, as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows:

Number of ordinary shares of RM0.50 each

Balance as of1.7.2014 Bought Disposed

Balance as of30.6.2015

Shares in the Company

Registered in the name of directorsDatuk Dr. Foong Weng Sum 1,083,228 - - 1,083,228Dato' Richard Ong Guan Seng 250,000 - - 250,000Dr. Foong Weng Cheong 2,662,500 - - 2,662,500Mr. Leong Keng Yuen 225,000 - - 225,000Mr. Ooi Ying Hong 80,000 - - 80,000

Indirect interest by virtue of shares held by a company in which the directors have interest

Datuk Dr. Foong Weng Sum 62,231,657 - - 62,231,657Dr. Foong Weng Cheong 62,231,657 - - 62,231,657Tuan Haji Mohd Jali @ Mohd Jalil Bin Sany 60,000 - - 60,000

Indirect interest by virtue of shares held by person connected to a director

Mr. Leong Keng Yuen - 275,000 - 275,000

By virtue of their interests in the shares of the Company, Datuk Dr. Foong Weng Sum and Dr. Foong Weng Cheong are also deemed to have an interest in the shares of all the subsidiary companies to the extent that the Company has interests.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the directors of the Company has received or become entitled to receive any benefit (other than the benefit included in the aggregate amount of emoluments received or due and receivable by directors as disclosed in the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby directors of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

DIRECTORS’ REPORT



AUDITORS

Messrs. Deloitte have indicated their willingness to accept appointment as auditors of the Company in place of the retiring auditors, Messrs. Deloitte & Touche.

Signed on behalf of the Boardin accordance with a resolution of the Directors,

DATUK DR. FOONG wENG SUM

DATO' RICHARD ONG GUAN SENG

Ipoh,30th September 2015

DIRECTORS’ REPORT



INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF HEXZA CORPORATION BERHAD

Report on the Financial Statements

We have audited the financial statements of Hexza Corporation Berhad, which comprise the statements of financial position of the Group and of the Company as of June 30, 2015 and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 36 to 87.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of these financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of June 30, 2015 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report that:

(a) in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiary companies have been properly kept in accordance with the provisions of the Act;

(b) we are satisfied that the accounts of the subsidiary companies that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group, and we have received satisfactory information and explanations as required by us for these purposes; and

(c) our auditors’ reports on the accounts of the subsidiary companies did not contain any qualification or any adverse comment made under Section 174 (3) of the Act.



INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF HEXZA CORPORATION BERHAD (continued)

Other Reporting Responsibilities

The supplementary information set out in Note 31 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility towards any other person for the contents of this report.

DELOITTE & TOUCHEAF 0834Chartered Accountants

LIM KENG PEOPartner - 2939/01/16(J)Chartered Accountant

30th September 2015



STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED JUNE 30, 2015

The Group The Company

Note2015RM

2014RM

2015RM

2014RM

Revenue 5 150,178,792 145,341,031 10,544,299 9,202,170

Investment revenue 7 783,240 734,101 790,290 812,180Other gains and (losses) 8 856,279 1,174,028 896,813 1,073,456Other operating income 9 344,944 204,801 48,955 58,793Changes in inventories of

finished goods, trading goods and work-in-progress 1,581,634 735,000 - -

Raw materials andconsumables used (72,958,078) (82,209,509) - -

Directors’ remuneration 10 (1,540,250) (1,469,250) (385,000) (342,500)Employee benefits expenses 10 (7,162,575) (7,029,631) (328,442) (329,177)Depreciation of property,

plant and equipment 14 (4,509,668) (5,448,367) (4,741) (4,667)Finance costs 11 (27,618) (62,297) - -Other operating expenses 9 (48,189,007) (41,222,260) (211,516) (207,709)

Profit before tax 19,357,693 10,747,647 11,350,658 10,262,546Income tax expense 12 (3,844,237) (2,163,958) (174,504) (235,047)

Profit for the year 15,513,456 8,583,689 11,176,154 10,027,499




Note2015RM

2014RM

2015RM

2014RM

Other comprehensiveincome/(loss)

Items that may be reclassifiedsubsequently to profit or loss:Net fair value changes in

available-for-salefinancial assets (3,694,677) 1,881,055 (3,695,277) 1,881,535

Reclassification of loss ondisposal of available-for-salefinancial assets 263,844 - 263,844 -

(3,430,833) 1,881,055 (3,431,433) 1,881,535

Total comprehensive incomefor the year 12,082,623 10,464,744 7,744,721 11,909,034

Profit attributable to:Owners of the Company 14,030,207 8,079,200 11,176,154 10,027,499Non-controlling interests 1,483,249 504,489 - -

15,513,456 8,583,689 11,176,154 10,027,499

Total comprehensive incomeattributable to:

Owners of the Company 10,599,374 9,960,255 7,744,721 11,909,034Non-controlling interests 1,483,249 504,489 - -

12,082,623 10,464,744 7,744,721 11,909,034

Earnings per ordinaryshare of RM0.50 each

Basic (sen) 13 7.0 4.0

Diluted (sen) 13 7.0 4.0

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED JUNE 30, 2015

The accompanying Notes form an integral part of the financial statements.




Note2015RM

2014RM

2015RM

2014RM

ASSETS

Non-current assetsProperty, plant and equipment 14 58,337,645 62,509,334 8,936 6,605Investment in subsidiary

companies 15 - - 68,890,748 68,858,748Other investments 16 46,824,851 57,308,378 46,804,651 57,288,778Goodwill arising on

consolidation 17 2,129,365 2,129,365 - -Deferred tax assets 12 358,000 431,000 - -

Total non-current assets 107,649,861 122,378,077 115,704,335 126,154,131

Current assetsInventories 18 21,793,677 20,097,283 - -Trade and other receivables 19 32,648,508 35,336,009 99,798 5,772,081Current tax assets 12 488 52,399 - -Other assets 21 20,014,468 326,754 19,687,705 20,776Cash and cash equivalents 22 62,150,011 73,264,971 52,732,054 56,514,471

Total current assets 136,607,152 129,077,416 72,519,557 62,307,328

Total assets 244,257,013 251,455,493 188,223,892 188,461,459

STATEMENTS OF FINANCIAL POSITIONAS OF JUNE 30, 2015





Note2015RM

2014RM

2015RM

2014RM

EQUITY AND LIABILITIES

Capital and reservesShare capital 23 100,190,018 100,190,018 100,190,018 100,190,018Reserves 24 117,844,122 115,253,587 87,534,806 87,805,286

218,034,140 215,443,605 187,724,824 187,995,304Non-controlling interests 15 6,797,159 6,567,272 - -

Total equity 224,831,299 222,010,877 187,724,824 187,995,304

Non-current liabilitiesDeferred tax liabilities 12 8,487,871 9,304,025 - -

Current liabilitiesTrade and other payables 25 7,409,597 12,588,690 87,954 80,417Current tax liabilities 12 706,850 681,704 32,074 41,204Accrued expenses 2,821,396 3,270,197 379,040 344,534Short-term borrowings 26 - 3,600,000 - -

Total current liabilities 10,937,843 20,140,591 499,068 466,155

Total liabilities 19,425,714 29,444,616 499,068 466,155

Total equity and liabilities 244,257,013 251,455,493 188,223,892 188,461,459

Net tangible assets per ordinary share 1.08 1.06





<--------- Attributable to the Owners of the Company --------->

The Group Note

ShareCapital

RM

InvestmentsRevaluation

ReserveRM

RetainedEarnings

RMSubtotal

RM

Non-Controlling

InterestsRM

TotalEquity

RM

Balance as of July 1, 2013 100,190,018 3,810,168 109,498,365 213,498,551 6,875,983 220,374,534

Profit for the year - - 8,079,200 8,079,200 504,489 8,583,689Other comprehensive

income - 1,881,055 - 1,881,055 - 1,881,055

Total comprehensive income for the year - 1,881,055 8,079,200 9,960,255 504,489 10,464,744

Payment of dividends 27 - - (8,015,201) (8,015,201) (813,200) (8,828,401)

Balance as of June 30, 2014 100,190,018 5,691,223 109,562,364 215,443,605 6,567,272 222,010,877

Profit for the year - - 14,030,207 14,030,207 1,483,249 15,513,456Other comprehensive

loss - (3,430,833) - (3,430,833) - (3,430,833)

Total comprehensive income/(loss) for the year - (3,430,833) 14,030,207 10,599,374 1,483,249 12,082,623

Payment of dividends 27 - - (8,015,201) (8,015,201) (1,215,000) (9,230,201)Acquisition of

additional equity interest in subsidiary - -

6,362 6,362 (38,362) (32,000)

Balance as of June 30, 2015 100,190,018 2,260,390 115,583,732 218,034,140 6,797,159 224,831,299


STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED JUNE 30, 2015




<---------------------- Attributable to the Owners of the Company ---------------------->Non-

Distributable Reserve

Distributable Reserve

The Company Note

ShareCapital

RM

InvestmentsRevaluation

ReserveRM

RetainedEarnings

RM

TotalEquity

RM

Balance as of July 1, 2013 100,190,018 3,803,608 80,107,845 184,101,471

Profit for the year - - 10,027,499 10,027,499Other comprehensive income - 1,881,535 - 1,881,535

Total comprehensive income for the year - 1,881,535 10,027,499 11,909,034

Payment of dividends 27 - - (8,015,201) (8,015,201)

Balance as of June 30, 2014 100,190,018 5,685,143 82,120,143 187,995,304

Profit for the year - - 11,176,154 11,176,154Other comprehensive loss - (3,431,433) - (3,431,433)

Total comprehensive income/(loss) for the year - (3,431,433) 11,176,154 7,744,721

Payment of dividends 27 - - (8,015,201) (8,015,201)

Balance as of June 30, 2015 100,190,018 2,253,710 85,281,096 187,724,824





The Group

Note2015RM

2014RM

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES

Profit for the year 15,513,456 8,583,689Adjustments for:

Depreciation of property, plant and equipment 4,509,668 5,448,367Income tax expense recognised in profit or loss 3,844,237 2,163,958Allowance for doubtful debts 331,254 -Inventories written off 82,143 204,666Unrealised loss on foreign exchange 28,694 -Finance costs 27,618 62,297Property, plant and equipment written off 25,033 6,583Cumulative loss reclassified from equity on

disposal of available-for-sale investments 263,844 -Dividend income (2,917,609) (2,205,570)Interest income (1,008,803) (812,112)Net gain arising from financial assets designated

as at FVTPL (1,004,453) (1,147,421)Gain on disposal of available-for-sale investments (249,230) -

19,445,852 12,304,457

Movements in working capital:(Increase)/Decrease in:

Inventories (1,778,537) (2,934,742)Trade and other receivables 2,246,589 (11,898,913)Other assets (16,114) 111,434

(Decrease)/Increase in:Trade and other payables (5,207,787) 4,966,472Accrued expenses (448,801) 359,343

Cash Generated From Operations 14,241,202 2,908,051

Dividends received from available-for-sale investments 2,917,609 2,188,070Interest received 2,122,914 1,969,550Income tax refunded 61,853 679,330Income tax paid (4,572,187) (2,046,774)Interest paid (27,618) (62,297)

Net Cash From Operating Activities 14,743,773 5,635,930

STATEMENT OF CASH FLOWSFOR THE YEAR ENDED JUNE 30, 2015



The Group

Note2015RM

2014RM

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES

Capital distribution/Proceeds from disposal ofavailable-for-sale investments 7,759,789 975,955

Purchase of assets under lease out arrangement (19,671,600) -Purchase of available-for-sale investments (721,709) (517,378)Purchase of property, plant and equipment (363,012) (1,005,550)Acquisition of additional equity interest in a subsidiary company (32,000) -

Net Cash Used In Investing Activities (13,028,532) (546,973)

CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES

Dividends paid to owners of the Company (8,015,201) (8,015,201)(Repayment of)/Proceeds from short-term borrowings (3,600,000) 3,600,000Dividends paid to non-controlling interest (1,215,000) (813,200)

Net Cash Used In Financing Activities (12,830,201) (5,228,401)

NET DECREASE IN CASH AND CASH EQUIVALENTS (11,114,960) (139,444)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 73,264,971 73,404,415

CASH AND CASH EQUIVALENTS AT END OF YEAR 22 62,150,011 73,264,971





The Company

Note2015RM

2014RM

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES

Profit for the year 11,176,154 10,027,499Adjustments for:

Income tax expense recognised in profit or loss 174,504 235,047Cumulative loss reclassified from equity on

disposal of available-for-sale investments 263,844 -Depreciation of property, plant and equipment 4,741 4,667Property, plant and equipment written off 3 2Dividend income (10,544,299) (9,202,170)Net gain arising from financial assets designated

as at FVTPL (911,430) (1,064,930)Gain on disposal of available-for-sale investments (249,230) -Interest income (790,290) (812,180)Allowance for doubtful debts - 13,593Allowance for diminution in value of investment

in subsidiary company no longer required - (8,528)

(876,003) (807,000)

Movements in working capital:

Decrease/(Increase) in:Other receivables 100,225 (9,943)Other assets 4,671 (6,824)

Increase/(Decrease) in:Other payables 8,960 (35,582)Accrued expenses 34,506 19,162

Cash Used In Operations (727,641) (840,187)Dividends received from subsidiary companies 7,627,650 6,997,000Dividends received from available-for-sale investments 2,916,649 2,187,670Interest received 1,701,720 1,886,867Income tax refunded 10,497 166,647Income tax paid (194,131) (198,375)

Net Cash From Operating Activities 11,334,744 10,199,622




The Company

Note2015RM

2014RM

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES

Capital distribution/Proceeds from disposal ofavailable-for-sale investments 7,759,789 975,955

Repayment from/(Advances to) subsidiary companies 5,572,058 (5,623,746)Purchase of assets under lease out arrangement (19,671,600) -Purchase of available-for-sale investments (721,709) (517,378)Acquisition of additional equity interest in a

subsidiary company (32,000) -Purchase of property, plant and equipment (7,075) (4,130)

Net Cash Used In Investing Activities (7,100,537) (5,169,299)

CASH FLOWS USED IN FINANCING ACTIVITIES

Dividends paid to owners of the Company (8,015,201) (8,015,201)Repayment to a subsidiary company (1,423) (1,423)

Net Cash Used In Financing Activities (8,016,624) (8,016,624)

NET DECREASE IN CASH AND CASH EQUIVALENTS (3,782,417) (2,986,301)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 56,514,471 59,500,772

CASH AND CASH EQUIVALENTS AT END OF YEAR 22 52,732,054 56,514,471





NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL INFORMATION The Company is a public limited company, incorporated and domiciled in Malaysia and is listed on the Main

Market of Bursa Malaysia Securities Berhad.

The Company is principally involved in investment holding.

The principal activities of the subsidiary companies are disclosed in Note 15.

TherehavebeennosignificantchangesinthenatureoftheprincipalactivitiesoftheCompanyanditssubsidiarycompaniesduringthefinancialyear.

TheregisteredofficeandprincipalplaceofbusinessoftheCompanyarelocatedatLot6&20,PersiaranTasek,KawasanPerindustrianTasek,31400Ipoh,PerakDarulRidzuan.

ThefinancialstatementsoftheGroupandoftheCompanywereauthorisedforissuebytheBoardofDirectorsin accordance with a resolution of the directors on 30thSeptember2015.

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedinaccordancewithMalaysian

Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and theprovisionsoftheCompaniesAct,1965inMalaysia.

2.1 Adoption of amendments to MFRSs

Amendments to MFRSs affecting amounts reported and/or disclosures in the financial statements

Inthecurrentyear,theGroupandtheCompanyhaveappliedanumberofamendmentstoMFRSsissued by theMalaysianAccountingStandardsBoard (“MASB”) thataremandatorilyeffective foranaccounting periodthatbeginsonorafterJuly1,2014.

TheadoptionofamendmentstoMFRSshashadnomaterialimpactonthedisclosuresorontheamounts recognisedinthefinancialstatements,exceptasfollows:

Amendments to MFRS 136 Recoverable Amount Disclosures for Non-Financial Assets

TheGroupandtheCompanyhaveappliedtheamendmentstoMFRS136Recoverable Amount Disclosures for Non-Financial Assetsforthefirsttimeinthecurrentyear.TheamendmentstoMFRS136removethe requirementtodisclosetherecoverableamountofacash-generatingunit(“CGU”)towhichgoodwillorother intangible assetswith indefinite useful lives had been allocatedwhen there has been no impairment or reversalof impairmentof therelatedCGU.Furthermore, theamendments introduceadditionaldisclosure requirementswhichisapplicablewhentherecoverableamountofanassetoraCGUismeasuredatfair value less costs of disposal. These new disclosures include the fair value hierarchy, key assumptions and valuation techniques used which are in line with the disclosures required by MFRS 13 Fair Value Measurements.

2.2 Standards in issue but not yet effective TheGroupandtheCompanyhavenotelectedforearlyadoptionoftherelevantnewandamendmentsto

MFRSswhichhavebeenissuedbutnotyeteffectiveuntilfutureperiodsatthedateofauthorisationforissue of these financial statements. The directors anticipate that the adoption of these Standards when they becomeeffectivewillhavenomaterialimpactonthefinancialstatementsoftheGroupandoftheCompany intheperiodofinitialapplicationexceptasdiscussedbelow:



MFRS 9 Financial Instruments

InNovember2014,theMASBissuedthefinalversionofMFRS9Financial Instrumentswhichreflectsall phasesofthefinancialinstrumentsprojectandreplacesMFRS139Financial Instruments: Recognition and Measurement and all previous versions of MFRS 9. The standard introduces new requirements for classificationandmeasurement,impairment,andhedgeaccounting.MFRS9iseffectiveforannualperiods beginningonorafterJanuary1,2018,withearlyapplicationpermitted.Retrospectiveapplicationisrequired, but comparative information isnot compulsory.Earlyapplicationof previous versionsofMFRS9 (2009, 2010and2013) ispermitted if thedateof initialapplication isbeforeFebruary1,2015.Theadoptionof MFRS9willhaveaneffecton theclassificationandmeasurementof theGroup’sandof theCompany’s financialassets,butnoimpactontheclassificationandmeasurementoftheGroup’sandoftheCompany’s financialliabilities.TheGroupandtheCompanyarecurrentlyassessingtheimpactofMFRS9andplansto adopt the new standard when applicable from the required effective date.

MFRS 15 Revenue from Contracts with Customers

MFRS15establishesasinglecomprehensivemodelforentitiestouseinaccountingforrevenuearisingfrom contractswithcustomers.MFRS15willsupersedethecurrentrevenuerecognitionguidanceincludingMFRS 118Revenue,MFRS111Construction Contracts andtherelatedInterpretationswhenitbecomeseffective.

ThecoreprincipleofMFRS15isthatanentityshouldrecogniserevenuetodepictthetransferofpromised goodsorservicestocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpectsto beentitledinexchangeforthosegoodsorservices.Specifically,theStandardintroducesa5-stepapproach torevenuerecognition:

Step1:Identifythecontract(s)withacustomer Step2:Identifytheperformanceobligationsinthecontract Step3:Determinethetransactionprice Step4:Allocatethetransactionpricetotheperformanceobligationsinthecontract Step5:Recogniserevenuewhen(oras)theentitysatisfiesaperformanceobligation

UnderMFRS15,anentityrecognisesrevenuewhen(oras)aperformanceobligationissatisfied,i.e.when ‘control’ of the goods or services underlying the particular performance obligation is transferred to thecustomer.FarmoreprescriptiveguidancehasbeenaddedinMFRS15todealwithspecificscenarios. Furthermore,extensivedisclosuresarerequiredbyMFRS15.

ThedirectorsoftheGroupandoftheCompanyanticipatethattheapplicationofMFRS15inthefuturemay haveanimpactontheamountsreportedanddisclosuresmadeinthesefinancialstatements.However,it isnotpracticabletoprovideareasonableestimateoftheeffectofMFRS15untiltheGroupandtheCompany complete a detailed review.

3. SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements of theGroupandof theCompanyhavebeenprepared on the historical cost basis

exceptforcertainfinancialinstrumentsthataremeasuredatfairvaluesoratamortisedcostsattheendofeachreportingperiod,asexplained in theaccountingpoliciesbelow.Historical cost isgenerallybasedon the fairvalueoftheconsiderationgiveninexchangeforassets.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable orestimatedusinganothervaluationtechnique.Inestimatingthefairvalueofanassetoraliability,theGroupand the Company take into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurementand/ordisclosurepurposesinthesefinancialstatementsisdeterminedonsuchabasis,exceptforshare-basedpaymenttransactionsthatarewithinthescopeofMFRS2,leasingtransactionsthatarewithinthescopeofMFRS117,andmeasurementsthathavesomesimilaritiestofairvaluebutarenotfairvalue,suchasnetrealisablevalueinMFRS102orvalueinuseinMFRS136.





3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Inaddition,forfinancialreportingpurposes,fairvaluemeasurementsarecategorisedintoLevel1,2or3basedon thedegree towhich the inputs to the fairvaluemeasurementsareobservableand thesignificanceof theinputstothefairvaluemeasurementinitsentirety,whicharedescribedasfollows:

• Level1inputsarequotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthattheentity can access at the measurement date;

• Level2inputsareinputs,otherthanquotedpricesincludedwithinLevel1,thatareobservablefortheasset or liability, either directly or indirectly; and

• Level3inputsareunobservableinputsfortheassetorliability.

The principal accounting policies are set out below. Basis of Consolidation TheconsolidatedfinancialstatementsincorporatethefinancialstatementsoftheCompanyandofthesubsidiary

companiescontrolledbytheCompany.ControlisachievedwheretheCompany:

• haspowerovertheinvestee;

• isexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvestee;and

• hastheabilitytouseitspowertoaffectitsreturns.

The results of subsidiary companies acquired or disposed of during the financial year are included in theconsolidatedstatementofprofitorlossandothercomprehensiveincomefromtheeffectivedateofacquisitionorup to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiary companies to bring theiraccountingpoliciesinlinewiththoseusedbyothermembersoftheGroup.

Allsignificantintragrouptransactions,balancesandincomeandexpensesareeliminatedinfullonconsolidation.Unrealisedlossesareeliminatedonconsolidationunlesscostscannotberecovered.

Non-controllinginterestsinsubsidiarycompaniesareidentifiedseparatelyfromtheGroup’sequitytherein.Theinterests of non-controlling shareholders may be initially measured either at fair value or at the non-controlling interests’proportionateshareofthefairvalueoftheacquiree’sidentifiablenetassets.Thechoiceofmeasurementbasis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controllinginterestsistheamountofthoseinterestsatinitialrecognitionplusthenon-controllinginterests’shareof subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if thisresultsinthenon-controllinginterestshavingadeficitbalance.

ChangesintheGroup’sownershipinterestsinsubsidiarycompaniesthatdonotresultintheGrouplosingcontrolareaccountedforasequitytransactions.ThecarryingamountsoftheGroup’sinterestsandthenon-controllinginterestsareadjustedtoreflectthechangesintheirrelativeinterestsinthesubsidiarycompanies.Anydifferencebetweentheamountbywhichthenon-controllinginterestsareadjustedandthefairvalueoftheconsiderationpaid or received is recognised directly in equity and attributed to owners of the Company.

When theGroup loses control of a subsidiary company, a gain or loss is recognised in profit or loss and iscalculatedas thedifferencebetween(i) theaggregateof the fairvalueof theconsideration receivedand thefairvalueofanyretainedinterestand(ii) thepreviouscarryingamountoftheassets(includinggoodwill),andliabilities of the subsidiary company and any non-controlling interests. When assets of the subsidiary company are carried at revalued amounts or fair values and the related cumulative gain or loss has been recognised in other comprehensive income and accumulated in equity, the amounts previously recognised in other comprehensive incomeareaccountedforasiftheGrouphaddirectlydisposedoftherelevantassets(i.e.reclassifiedtoprofitorlossortransferreddirectlytoretainedearningsasspecifiedbyapplicableStandards).Thefairvalueofanyinvestment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognitionforsubsequentaccountingunderMFRS139Financial Instruments: Recognition and Measurement or,whenapplicable,thecostoninitialrecognitionofaninvestmentinanassociateorajointlycontrolledentity.




Business Combinations Acquisitions of subsidiary companies and businesses are accounted for using the acquisition method. The

consideration transferred in a business combination is measured at fair value which is calculated as the sum of theacquisition-datefairvaluesofassetstransferredbytheGroup,liabilitiesincurredbytheGrouptotheformerownersof theacquireeandequity instruments issuedby theGroup inexchange for control of theacquiree.Acquisition-relatedcostsarerecognisedinprofitorlossasincurred.

Segment Reporting

Formanagementpurposes,theGroupisorganisedintooperatingsegmentsthatengagesinbusinessactivitiesfromwhichitmayearnrevenuesandincurexpenses,includingrevenuesandexpensesthatrelatedtotransactionswithanyof theGroup’sothercomponents.TheGroup’sreportingsegmentswere identifiedbasedon internalreportsthatareregularlyreviewedbytheGroup’schiefoperatingdecisionmakerinordertoallocateresourcestothesegmentandtoassessitsperformance.TheGroup’sreportablesegmentsarestrategicbusinessoperationsthataremanagedseparatelybasedontheGroup’smanagementandinternalreportingstructure.

Revenue Recognition Sale of goods are recognised upon delivery of products and when the risks and rewards of ownership have

passed to the customers. Sales are measured at the fair value of the consideration received or receivable andrepresentgrossinvoicedvalueofgoodssoldnetofsalestax/goodsandservicestax,tradediscountsandallowances.

Incomerelatingtopropertydevelopmentprojectsisrecogniseduponsigningoftheindividualsaleandpurchaseagreements, and risks and rewards of ownership of the properties are transferred.

Dividend income represents gross dividends from subsidiary companies and from quoted and unquotedinvestmentsandisrecognisedwhentheshareholders’righttoreceivepaymentisestablished.

Interestincomeisaccruedonatimebasis,byreferencetotheprincipaloutstandingandattheeffectiveinterestrates applicable.

Foreign Currencies

The individual financial statements of each group entity are presented in Ringgit Malaysia, the currency oftheprimaryeconomicenvironment inwhich theentityoperates.For thepurposeof theconsolidatedfinancialstatements, the results and financial position of each entity are expressed inRinggitMalaysia, which is thefunctionalcurrencyoftheCompany,andalsothepresentationcurrencyfortheconsolidatedfinancialstatements.

In preparing the financial statements of the individual entities, transactions in currencies other than theentity’s functional currencyare recorded inRinggitMalaysia at the ratesof exchangeprevailing on thedateof the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslatedintoRinggitMalaysiaattheexchangeratesprevailingatthatdate.Non-monetaryitemscarriedatfair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences are recognised in profit or loss in the year in which they arise except for exchangedifferences arising on the retranslation of non-monetary items carried at fair value in respect of which gains and lossesarerecognisedinothercomprehensiveincome.Forsuchnon-monetaryitems,theexchangecomponentof that gain or loss is also recognised in other comprehensive income.

Employee Benefits

Short-term employee benefits

Wages,salaries,bonusesandsocialsecuritycontributionsarerecognisedasanexpenseintheyearinwhichtheassociatedservicesarerenderedbyemployeesoftheGroupandoftheCompany.Short-termaccumulatingcompensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short-term non-accumulating compensated absences such as sick leave are recognised when the absences occur.





Defined contribution plan

TheGroupand theCompanymakestatutorycontributions toapprovedprovident fundsand thecontributionsarechargedtoprofitorlossasincurred.Theapprovedprovidentfundsaredefinedcontributionplans.Oncethecontributions have been paid, there are no further payment obligations.

Taxation

Incometaxexpenserepresentsthesumofthetaxcurrentlypayableanddeferredtax.

Current tax

Thetaxcurrentlypayableisbasedontaxableprofitfortheyear.Taxableprofitdiffersfromprofitasreportedinprofitorlossbecauseitexcludesitemsofincomeorexpensethataretaxableordeductiblepertainingtopreviousyearsand it furtherexcludes items thatarenever taxableordeductible.The liabilityof theGroupandof theCompanyforcurrenttaxiscalculatedusingtaxratesthathavebeenenactedorsubstantivelyenactedbytheendof the reporting period.

Deferred tax

Deferredtaxisrecognisedondifferencesbetweenthecarryingamountsofassetsandliabilitiesinthefinancialstatementsandthecorrespondingtaxbasesusedinthecomputationoftaxableprofit.Deferredtaxliabilitiesaregenerallyrecognisedforalltaxabletemporarydifferencesanddeferredtaxassetsaregenerallyrecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthatitisprobablethattaxableprofitswillbeavailableagainstwhichthosedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.Suchdeferredtaxassetsandliabilitiesarenotrecognisedifthetemporarydifferencearises fromgoodwill or from the initial recognition (other than in abusiness combination) of otherassetsandliabilitiesinatransactionthataffectsneitherthetaxableprofitnortheaccountingprofit.

Thecarryingamountofdeferredtaxassetsisreviewedattheendofeachreportingperiodandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassetto be recovered.

Deferred tax assets and liabilities aremeasured at the tax rates that are expected to apply in the period inwhichtheliabilityissettledortheassetisrealised,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.ThemeasurementofdeferredtaxliabilitiesandassetsreflectsthetaxconsequencesthatwouldfollowfromthemannerinwhichtheGroupandtheCompanyexpect,at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

DeferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandwhentheyrelatetoincometaxesleviedbythesametaxationauthorityandtheGroupandtheCompanyintendtosettletheircurrenttaxassetsandliabilitiesonanetbasis.

Current and deferred tax for the year

Currentanddeferredtaxarerecognisedasanexpenseorincomeinprofitorloss,exceptwhentheyrelatetoitemsthatarerecognisedoutsideprofitorloss(whetherinothercomprehensiveincomeordirectlyinequity),inwhichcasethetaxisalsorecognisedoutsideprofitorloss;orwhentheyarisefromtheinitialaccountingforabusinesscombination.Inthecaseofabusinesscombination,thetaxeffectistakenintoaccountincalculatinggoodwillordeterminingtheexcessoftheinterestoftheacquirerinthenetfairvalueoftheidentifiableassets,liabilities and contingent liabilities over cost of the acquiree.




Property, Plant and Equipment

Property,plantandequipmentarestatedatcost lessaccumulateddepreciationandaccumulated impairmentlosses, if any.

Depreciation ischargedsoas towriteoff thecostofproperty,plantandequipment,other than freehold landand capital work-in-progress, over their estimated useful lives, after taking into account their estimated residual value, using the straight-linemethod. Assets held under finance leases are depreciated over their expecteduseful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.

Capital work-in-progress including properties in the course of construction for production or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifyingassets,borrowingcostscapitalised inaccordancewith theGroup’saccountingpolicy.Depreciationof these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Freeholdlandisnotdepreciated.Long-termleaselandisamortisedevenlyovertheleaseperiodof64and97yearscommencingfrom2005and1989respectively.

Short-termleaselandareamortisedevenlyovertheleaseperiodrangingfrom57½yearsto79yearscommencingfrom1985,2006and1994respectively.

Theannualdepreciationratesareasfollows:

Buildings and improvements 2%to10%

Plant,machineryandequipment 5%to20%

Furniture,fixturesandofficeequipment 10%to331/3%

Motor vehicles and forklifts 20%

The estimated useful lives, residual values and depreciation method of property, plant and equipment are reviewed at each year end, with the effect of any changes in estimates accounted for prospectively.

The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as thedifferencebetweenthesaleproceedsandthecarryingamountoftheassetandisrecognisedinprofitorloss.

Investment in Subsidiary Companies

Investmentinsubsidiarycompanieswhichareeliminatedonconsolidation,arestatedatcostlessaccumulatedimpairmentlosses,ifany,intheCompany’sseparatefinancialstatements.

Goodwill

Goodwill acquired in a business combination is initially recognised as an asset at cost and is subsequentlymeasured at cost less any accumulated impairment losses.

Goodwillismeasuredastheexcessofthesumoftheconsiderationtransferred,theamountofanynon-controllinginterests in theacquiree,andthefairvalueof theacquirer’spreviouslyheldequity interest in theacquiree(ifany)overthenetoftheacquisition-dateamountsoftheidentifiableassetsacquiredandtheliabilitiesassumed.If,afterreassessment,thenetoftheacquisition-dateamountsoftheidentifiableassetsacquiredandliabilitiesassumedexceedsthesumoftheconsiderationtransferred,theamountofanynon-controllinginterestsintheacquireeandthefairvalueoftheacquirer’spreviouslyheldequityinterestintheacquiree(ifany),theexcessisrecognisedimmediatelyinprofitorlossasabargainpurchasegain.

Goodwillisnotamortised.Instead,itistestedforimpairmentannuallyormorefrequentlyifeventsorchangesincircumstances indicate that it might be impaired.





Forthepurposeofimpairmenttesting,goodwill isallocatedtoeachofthecash-generatingunitsoftheGroupexpected tobenefit fromthesynergiesof thecombination.Cash-generatingunits towhichgoodwillhasbeenallocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired.Iftherecoverableamountofthecash-generatingunitislessthanthecarryingamountoftheunit,theimpairmentlossisallocatedfirsttoreducethecarryingamountofanygoodwillallocatedtotheunitandthentothe other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. Any impairment lossisrecognisedimmediatelyintheconsolidatedprofitorlossandanyimpairmentlossrecognisedforgoodwillis not subsequently reversed.

Ondisposalofanentityoroperation,thegoodwillassociatedwiththeentityoroperationdisposedofisincludedin the carrying amount of the entity or operation when determining the gain or loss on disposal.

Impairment of Assets Excluding Goodwill

At theendofeachreportingperiod, theGroupandtheCompanyreviewthecarryingamountsof theirassets(otherthandeferredtaxassets,inventoriesandfinancialassetswhicharedealtwithintheirrespectivepolicies)to determine if there is any indication that those assetsmay be impaired. If any such indication exists, therecoverable amount of the asset is estimated.

Whereitisnotpossibletoestimatetherecoverableamountofanindividualasset,theGroupandtheCompanyestimate the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generatingunitsforwhichareasonableandconsistentallocationbasiscanbeidentified.

Recoverableamount is thehigherof fairvalue lesscosts tosellandvalue inuse. Inassessingvalue inuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.

Wheneverthecarryingamountofanassetexceedsitsrecoverableamount,animpairmentlossisrecognisedinprofitorloss.Animpairmentlossisreversediftherehasbeenachangeintheestimateusedtodeterminetherecoverable amount.

An impairment loss isonly reversed to theextent that thecarryingamountof theassetdoesnotexceed thecarrying amount that would have been determined, net of depreciation or amortisation, had no impairment loss beenrecognisedfortheassetinprioryears.Areversalisrecognisedimmediatelyinprofitorloss.

Inventories

Inventoriesarevaluedatthelowerofcostandnetrealisablevalue.Costisdeterminedprincipallyonthe“WeightedAverage”method.Costofrawmaterialsandconsumablesandgoods-in-transitcomprisetheoriginalpurchasepricepluscostincurredinbringingtheinventoriestotheirpresentlocation.Thecostoffinishedgoodsandwork-in-progress comprises the cost of raw materials, direct labour and a proportion of the production overheads.

Inventories of unsold completed development units are stated at the lower of cost and net realisable value.Costincludestherelevantcostofland,developmentexpenditureandrelatedinterestcostincurredduringthedevelopment year.

Net realisable value represents the estimated selling price in the ordinary course of business less all other estimated costs to completion.

Borrowing Costs

Borrowing costs directly attributable to construction of assets which require a substantial period of time to get them ready for their intended use are capitalised and included as part of the related assets. Capitalisation of borrowing costs will cease when the assets are ready for their intended use.

Allotherborrowingcostsarerecognisedasanexpenseintheyearinwhichtheyareincurred.




Provisions

ProvisionsarerecognisedwhentheGroupandtheCompanyhavepresentobligation(legalorconstructive)asaresultofpasteventanditisprobablethattheGroupandtheCompanywillberequiredtosettletheobligation,and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present

obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.Whereaprovision ismeasuredusing thecashflowsestimated tosettle thepresentobligation, itscarryingamountisthepresentvalueofthosecashflows.

Whensomeoralloftheeconomicbenefitsrequiredtosettleaprovisionareexpectedtoberecoveredfromathird party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Financial Instruments Financialinstrumentsarerecognisedinthestatementsoffinancialpositionwhen,andonlywhentheGroupand

theCompanybecomeapartytothecontractualprovisionsofthefinancialinstruments.

Wherethepurchaseorsaleofafinancialassetisunderacontractwhosetermsrequiredeliveryofthefinancialasset within the timeframe established by the market concerned, such financial assets are recognised andderecognised on trade date.

Financialinstrumentsareinitiallymeasuredatfairvalue,plustransactioncosts,exceptforthosefinancialassetsandfinancialliabilitiesclassifiedasatfairvaluethroughprofitorloss(“FVTPL”),whichareinitiallymeasuredatfairvalue.Transactioncoststhataredirectlyattributabletotheacquisitionorissueofthefinancialassetsandfinancialliabilities(otherthanfinancialassetsandfinancialliabilitiesatFVTPL)areaddedtoordeductedfromthefairvalueofthefinancialassetsorfinancialliabilities,asappropriate,oninitialrecognition.

Effective interest method

The effective interestmethod is amethod of calculating the amortised cost of a financial instrument and ofallocatinginterestincomeorexpenseovertherelevantperiod.Theeffectiveinterestrateistheratethatexactlydiscountsestimatedfuturecashreceiptsorpayments(includingallfeesandpointspaidorreceivedthatforman integralpartof theeffective interest rate, transactioncostsandotherpremiumsordiscounts) through theexpectedlifeofthefinancialassetorfinancialliability,or(whereappropriate)ashorterperiod,tothenetcarryingamount on initial recognition.

Income and expense are recognised on an effective interest basis for debt instruments other than those financialassetsandfinancialliabilitiesclassifiedasatFVTPL.

(a) Financial assets Financial assets of the Group and of the Company are classified into at FVTPL, ‘available-for-sale’

(“AFS”) financial assets and ‘loans and receivables’. The classification depends on the nature and purposeofthefinancialassetsandisdeterminedatthetimeofinitialrecognition.

(i) Financial assets at FVTPL

FinancialassetsareclassifiedasatFVTPLwhenthefinancialasset iseitherheld for tradingor it is designatedasatFVTPL.

Afinancialassetisclassifiedasheldfortradingif:

• ithasbeenacquiredprincipallyforthepurposeofsellingitinthenearterm;or

• oninitialrecognitionitispartofaportfolioofidentifiedfinancialinstrumentsthattheGroupand theCompanymanagetogetherandhasarecentactualpatternofshort-termprofit-taking;or

• itisaderivativethatisnotdesignatedandeffectiveasahedginginstrument.





AfinancialassetotherthanafinancialassetheldfortradingmaybedesignatedasatFVTPLuponinitial recognitionif:

• suchdesignationeliminatesorsignificantlyreducesameasurementorrecognitioninconsistency that would otherwise arise; or

• thefinancialassetformspartofagroupoffinancialassetsorfinancialliabilitiesorboth,which ismanagedanditsperformanceisevaluatedonafairvaluebasis,inaccordancewiththeGroup’s andtheCompany’sdocumentedriskmanagementorinvestmentstrategy,andinformationabout the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and MFRS 139 Financial Instruments: Recognition and Measurement permits the entire combined contract (assetorliability)tobedesignatedasatFVTPL.

FinancialassetsatFVTPLarestatedatfairvalue,withanygainsorlossesarisingonremeasurement recognisedinprofitorloss.Thenetgainorlossrecognisedinprofitorlossincorporatesanydividend orinterestearnedonthefinancialassetandisincludedinthe“othergainsandlosses”lineitem.Fair valueisdeterminedinthemannerdescribedinNote30.

(ii) AFS financial assets

AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at FVTPL. All AFSfinancialassetswiththeexceptionofunquotedshareswhicharemeasuredatcostlessimpairment, aremeasuredatfairvalueattheendofthereportingperiod.Gainsandlossesarisingfromchanges in fair value are recognised in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment losses, interest calculated using the effective interestmethod,andforeignexchangegainsandlossesonmonetaryassets,whicharerecognisedin profitorloss.Wheretheinvestmentisdisposedoforisdeterminedtobeimpaired,thecumulativegain orlosspreviouslyaccumulatedintheinvestmentrevaluationreserveisreclassifiedtoprofitorloss.

Dividends on AFS equity instruments are recognised in profit or loss when the Group’s and the Company’srighttoreceivethedividendsisestablished.

(iii) Loans and receivables

Loans and receivables are non-derivative financial assetswith fixed or determinable payments that arenotquotedinanactivemarket.Loansandreceivablesaremeasuredatamortisedcostusingthe effectiveinterestmethod,lessanyimpairment.Interestincomeisrecognisedbyapplyingtheeffective interestrate,exceptforshort-termreceivableswhentherecognitionofinterestwouldbeimmaterial.

(iv) Impairment of financial assets

Financialassets,otherthanthoseatFVTPL,areassessedfor indicatorsof impairmentattheendof eachreportingperiod.Financialassetsareconsideredtobeimpairedwhenthereisobjectiveevidence that,asaresultofoneormoreeventsthatoccurredaftertheinitialrecognitionofthefinancialasset, theestimatedfuturecashflowsoftheinvestmenthavebeenaffected.

For equity investments classified asAFS, a significant or prolonged decline in the fair value of the securitybelowitscostisconsideredtobeobjectiveevidenceofimpairment.

Forallotherfinancialassets,objectiveevidenceofimpairmentcouldinclude:

• significantfinancialdifficultyoftheissuerorcounterparty;or

• breachofcontract,suchasdefaultordelinquencyininterestorprincipalpayments;or

• itbecomingprobablethattheborrowerwillenterbankruptcyorfinancialre-organisation;or

• thedisappearanceofanactivemarketforthatfinancialassetbecauseoffinancialdifficulties.




Forcertaincategoriesoffinancialasset,suchas trade receivables,assets thatareassessednot to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include theGroup’s and theCompany’s pastexperienceofcollectingpayments,anincreaseinthenumberofdelayedpaymentsintheportfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the differencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflows, discountedatthefinancialasset’soriginaleffectiveinterestrate.

Forfinancialassetscarriedatcost,theamountoftheimpairmentlossismeasuredasthedifference between the asset’s carrying amount and the present value of the estimated future cash flows discountedatthecurrentmarketrateofreturnforasimilarfinancialasset.Suchimpairmentlosswillnot be reversed in subsequent periods.

Thecarryingamountof thefinancialasset is reducedby the impairment lossdirectly forallfinancial assetswiththeexceptionoftradereceivables,wherethecarryingamountisreducedthroughtheuseof an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are debited against the allowance account and changes in the carrying amount of the allowance account are recognised in profitorloss.

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognisedinothercomprehensiveincomearereclassifiedtoprofitorlossintheperiod.

WiththeexceptionofAFSequityinstruments,if,inasubsequentperiod,theamountoftheimpairment lossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurringaftertheimpairment was recognised, the previously recognised impairment loss is reversed throughprofit or loss to the extentthatthecarryingamountofthefinancialassetatthedatetheimpairmentisreverseddoesnot exceedwhattheamortisedcostwouldhavebeenhadtheimpairmentnotbeenrecognised.

In respectofAFSequitysecurities, impairment lossespreviouslyrecognised inprofitor lossarenot reversedthroughprofitorloss.Anyincreaseinfairvaluesubsequenttoanimpairmentlossisrecognised in other comprehensive income.

(v) Derecognition of financial assets

TheGroupandtheCompanyderecogniseafinancialassetonlywhenthecontractualrightstothecash flowsfromtheassetexpire,orwhenittransfersthefinancialassetandsubstantiallyalltherisksand rewardsofownershipof theasset toanotherentity. If theGroupand theCompanyneither transfer nor retain substantially all the risks and rewards of ownership and continue to control the transferred asset, theGroupand theCompany recognise their retained interest in theassetandanassociated liabilityforamountstheymayhavetopay.IftheGroupandtheCompanyretainsubstantiallyalltherisks and rewardsof ownership of a transferred financial asset, theGroupand theCompany continue to recognisethefinancialassetandalsorecogniseacollateralisedborrowingfortheproceedsreceived.

(b) Financial liabilities and equity instruments

(i) Classification as debt or equity

Debtandequityinstrumentsareclassifiedaseitherfinancialliabilitiesorasequityinaccordancewith thesubstanceofthecontractualarrangementandthedefinitionofafinancialliabilityandanequity instrument.

(ii) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deductingallofitsliabilities.EquityinstrumentsissuedbytheGroupandtheCompanyarerecognised at the proceeds received, net of direct issue costs.





(iii) Financial liabilities

FinancialliabilitiesoftheGroupandoftheCompany,includingborrowings,areclassifiedinto“other financialliabilities”category,andareinitiallymeasuredatfairvalue,netoftransactioncosts.

Other financial liabilitiesare subsequentlymeasuredat amortised cost using theeffective interest method,withinterestexpenserecognisedonaneffectiveyieldbasis.

(iv) Derecognition of financial liabilities

TheGroupandtheCompanyderecognisefinancialliabilitieswhen,andonlywhen,theGroup’sand theCompany’sobligationsaredischarged,cancelledortheyexpire.


TheGroupandtheCompanyadopttheindirectmethodinthepreparationofthestatementsofcashflows.

Cash equivalents are short-term, highly liquid investments with maturities of three months or less from the date ofacquisitionandarereadilyconvertibletocashwithinsignificantrisksofchangesinvalue.

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

IntheprocessofapplyingtheGroup’sandtheCompany’saccountingpolicies,thedirectorsareoftheopinionthat therearenoinstancesofapplicationof judgementwhichareexpectedtohaveasignificanteffectontheamountsrecognisedinthefinancialstatements.

IntheapplicationoftheaccountingpoliciesoftheGroupandoftheCompany,thedirectorsarerequiredtomakeestimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from othersources.Theestimatesandassociatedassumptionsarebasedonhistoricalexperienceandotherfactorsthat are considered to be relevant. Actual results may differ from these estimates.

Theestimatesandunderlyingassumptionsarereviewedonanongoingbasis.Revisionstoaccountingestimatesare recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reportingperiod,thathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyear,arediscussedbelow:

(a) ImpairmentofGoodwill

TheGroup test goodwill for impairment annually in accordancewith its accounting policy.More regular reviews are performed if events indicate that this is necessary.

Forthepurposeofassessingimpairment,goodwillisallocatedtocash-generatingunitsthatareexpectedto benefitfromthesynergiesofthebusinesscombinationinwhichthegoodwillarose.

Significant judgementisrequiredintheestimationofthepresentvalueoffuturecashflowsgeneratedby thecash-generatingunits,which involveuncertaintiesandaresignificantlyaffectedbyassumptionsused andjudgementmaderegardingestimatesoffuturecashflowsanddiscountrates.Changesinassumptions couldsignificantlyaffecttheresultsofthetestsforimpairmentofgoodwill.

(b) ImpairmentofProperty,PlantandEquipmentandOtherNon-currentAssets

TheGroupandtheCompanyassessimpairmentofassetswhenevertheeventsorchangesincircumstances indicate that the carrying amount of an asset may not be recoverable, i.e. the carrying amount of the asset is more than the recoverable amount.



Recoverableamountismeasuredatthehigherofthefairvaluelesscosttosellforthatassetanditsvalue- in-use.Thevalue-in-useisthenetpresentvalueoftheprojectedfuturecashflowsderivedfromthatasset discountedatanappropriatediscountrate.ProjectedfuturecashflowsarebasedontheGroup’sandthe Company’sestimates,approvedbythemanagementcoveringaperiodoffiveyearsandcalculatedbased on historical, sector and industry trends, general market and economic conditions, changes in technology andotheravailableinformation.Theterminalvalueiscalculatedbasedontheprojectedresidualvalueofthe assetattheendofthefifthyear.

ManagementoftheGroupandtheCompanyhavecarriedoutanimpairmentreviewontheirproperty,plant and equipment, and concluded that there is no indication of impairment.

(c) EstimatedUsefulLivesofProperty,PlantandEquipment

TheGroupandtheCompanyregularlyreviewtheestimatedusefullivesofproperty,plantandequipment basedonfactorssuchasbusinessplanandstrategies,expected levelofusageandfuturetechnological developments. Future results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned above. A reduction in the estimated useful lives of property, plant and equipment would increase the recorded depreciation and decrease the value of property, plant and equipment.

(d) RecoverabilityofReceivables

TheGroup and theCompanymake allowance for doubtful receivables based on an assessment of the recoverability of trade and other receivables. An allowance is established for trade or other receivable when there is objectiveevidence that theGroupand theCompanywill not beable to collect all amounts due according to theoriginal termsof transactions.The identificationof doubtful receivables requiresuseof judgementandestimateswithreferencetotheageingprofileandcollectionpatterns.Wheretheexpectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivablesanddoubtfulreceivablesexpensesintheperiodinwhichsuchestimatehasbeenchanged.





5. REVENUE

The Group The Company2015RM

2014RM

2015RM

2014RM

Manufacturing 145,634,020 140,543,041

Trading 1,628,123 2,592,820

Dividendincome:

Shares quoted in Malaysia 2,011,140 1,526,537 2,011,140 1,526,537

Investmentfunds 490,489 226,224 490,489 226,224

Unquotedshares 388,080 426,888 388,080 426,888

Shares quoted outside Malaysia 26,940 25,521 26,940 25,521

Subsidiary companies - - 7,627,650 6,997,000

150,178,792 145,341,031 10,544,299 9,202,170

Thefollowingisananalysisofrevenueearnedonfinancialassetsandnon-financialassets:


2014RM

2015RM

2014RM

Revenueearnedon:

Financial assets designatedasFVTPL 490,489 226,224 490,489 226,224

Available-for-salefinancialassets 2,426,160 1,978,946 2,426,160 1,978,946

Non-financialassets 147,262,143 143,135,861 7,627,650 6,997,000

150,178,792 145,341,031 10,544,299 9,202,170

6. SEGMENT INFORMATION

The Group’s reporting segments were identified based on internal reports that are regularly reviewed bytheGroup’s chief operating decisionmaker in order to allocate resources to the segment and to assess itsperformance.

TheGroup’sreportablesegmentsarestrategicbusinessoperationsthataremanagedseparatelybasedontheGroup’smanagementandinternalreportingstructure.

Formanagementpurposes,theGroupisorganisedintothefollowingoperatingdivisions:

- Investmentholding

- Manufacture and sale of formaldehyde based adhesives and resins for timber related industries, ethyl alcohol,naturalvinegar,cooler,liquefiedcarbondioxideandkaoliangwine(“Manufacturing”)

- Trading

- Others(propertydevelopment,dormantandpre-operatingcompanies)

NooperatingsegmentshavebeenaggregatedinarrivingatthereportablesegmentsoftheGroup.




The Group2015

Investmentholding

RMManufacturing

RMTrading

RMOthers

RMEliminations

RMConsolidated

RM

RevenueExternalcustomers 2,916,649 145,634,020 1,628,123 150,178,792Inter-segment 7,627,650 1,222,265 14,217,747 (23,067,662)

10,544,299 146,856,285 15,845,870 (23,067,662) 150,178,792

ResultsInterestincome 790,290 338,132 (119,619) 1,008,803Finance costs (135,533) (11,704) 119,619 (27,618)Depreciationof

property, plantand equipment (4,741) (4,498,393) (6,526) (8) (4,509,668)

Non-cashexpensesother than depreciation (14,617) (467,119) (2) - - (481,738)

Segmentprofit/(loss) 10,560,368 15,177,194 272,942 (13,444) (7,620,552) 18,376,508Interestincome 790,290 338,132 (119,619) 1,008,803Finance costs (135,533) (11,704) 119,619 (27,618)

Profitbeforetax 11,350,658 15,379,793 261,238 (13,444) (7,620,552) 19,357,693Incometaxexpense (3,844,237)

Profitfortheyear 15,513,456

AssetsReportable

segment assets 119,247,499 119,634,086 2,222,818 2,794,122 243,898,525Unallocated

corporate assets 358,488

Consolidated total assets 244,257,013

LiabilitiesReportable

segment liabilities (396,200) (9,211,937) (430,469) (192,387) - (10,230,993)Unallocated

corporate liabilities (9,194,720)

Consolidated total liabilities (19,425,714)

Other informationCapital additions 7,075 339,483 16,454 - - 363,012




6. SEGMENT INFORMATION (continued)

The Group2014

Investmentholding

RMManufacturing

RMTrading

RMOthers

RMEliminations

RMConsolidated

RM

RevenueExternalcustomers 2,205,170 140,543,041 2,592,820 - - 145,341,031

Inter-segment 6,997,000 1,987,340 19,540,465 - (28,524,805) -

9,202,170 142,530,381 22,133,285 - (28,524,805) 145,341,031

ResultsInterestincome 812,180 122,539 - - (122,607) 812,112

Finance costs - (170,467) (14,437) - 122,607 (62,297)

Depreciationofproperty, plant and equipment (4,667) (5,414,791) (28,806) (103) - (5,448,367)

Non-cashexpensesother than depreciation (13,595) (210,944) (302) (1) 13,595 (211,247)

Segmentprofit 9,450,366 6,934,837 552,672 54,865 (6,994,908) 9,997,832

Interestincome 812,180 122,539 - - (122,607) 812,112

Finance costs - (170,467) (14,437) - 122,607 (62,297)

Profitbeforetax 10,262,546 6,886,909 538,235 54,865 (6,994,908) 10,747,647

Incometaxexpense (2,163,958)

Profitfortheyear 8,583,689

AssetsReportable

segment assets 113,945,008 130,447,726 3,776,945 2,802,415 - 250,972,094

Unallocatedcorporate assets 483,399

Consolidated total assets 251,455,493

LiabilitiesReportable

segment liabilities (352,734) (18,880,344) (36,837) (188,972) - (19,458,887)

Unallocatedcorporate liabilities (9,985,729)

Consolidated total liabilities (29,444,616)

Other informationCapital additions 4,130 995,782 5,638 - - 1,005,550




Segmentprofitrepresentstheprofitearnedbyeachsegmentbeforeinterestrevenue,financecostsandincometax.Thisisthemeasurereportedtothechiefoperatingdecisionmakerforthepurposeofresourceallocationandassessment of segment performance.

Forthepurposeofmonitoringsegmentperformanceandallocatingresources:

• Allassetsareallocatedtothereportablesegmentsotherthancurrentanddeferredtaxassets.Goodwillis allocatedtothemanufacturingsegmentasdisclosedinNote17.

• Allliabilitiesareallocatedtothereportablesegmentsotherthancurrentanddeferredtaxliabilities.

The directors are of the opinion that all inter-segment transactions have been entered into in the normal course of business and have been established on terms and conditions agreed by the parties.

Revenue from major products

ThefollowingisananalysisoftheGroup’srevenuefromitsmajorproducts:

2015RM

2014RM

Formaldehyde based resins and ethanol 146,931,900 142,726,635

InformationontheGroup’soperationsbygeographicalsegmenthasnotbeenprovidedastheGroupoperatespredominantly in Malaysia. Accordingly, the information about geographical areas as required by the standard is not disclosed.

7. INVESTMENT REVENUE


2014RM

2015RM

2014RM

Interestincomefrom:

Fixeddeposits 505,192 378,153 393,583 334,025

Medium term note 277,088 355,548 277,088 355,548

Subsidiarycompanies(Note20) - 119,619 122,607

782,280 733,701 790,290 812,180

Dividendincome 960 400 - -

783,240 734,101 790,290 812,180

Thefollowingisananalysisofinvestmentrevenueearnedonfinancialassetsbycategoryofasset:


2014RM

2015RM

2014RM

Available-for-salefinancialassets 278,048 355,948 277,088 355,548

Loansandreceivables(includingcashandcashequivalents) 505,192 378,153 513,202 456,632

783,240 734,101 790,290 812,180




8. OTHER GAINS AND (LOSSES)

Includedinothergainsand(losses)arethefollowing:


2014RM

2015RM

2014RM

NetgainarisingonfinancialassetsdesignatedasatFVTPL 1,004,453 1,147,341 911,430 1,064,930

Gainondisposalofavailable-for-sale investments 249,230 - 249,230 -

Insuranceclaimsreceived 1,300 19,977 - -

Cumulativelossreclassifiedfromequity on disposal of available-for-sale investments (263,844) - (263,844) -

Realised(loss)/gainonforeign exchange (81,133) 13,293

Unrealisedlossonforeignexchange (28,694) -

Property,plantandequipmentwritten off (25,033) (6,583) (3) (2)

Allowance for diminution in value of investment in subsidiary companies no longer required - 8,528

856,279 1,174,028 896,813 1,073,456

9. OTHER OPERATING INCOME/(EXPENSES)

Includedinotheroperatingincome/(expenses)arethefollowing:


2014RM

2015RM

2014RM

Interestreceivedonlatepayments 226,523 78,411 - -

Feespaid/payabletoexternalauditors:Statutoryaudit: Current yearPrioryear

(151,000)1,500

(147,500)-

(28,000)-

(27,000)-

Non-audit services (3,000) (3,000) (3,000) (3,000)

Allowancefordoubtfuldebts:Amount owing by subsidiary companiesThird parties

-(331,254)

--

--

(13,593)-

Rentalofequipment (3,841) (5,040) - -




10. DIRECTORS’ REMUNERATION AND EMPLOYEE BENEFITS EXPENSES


2014RM

2015RM

2014RM

Directors of the CompanyExecutivedirector:

Fees 86,000 78,500 60,000 52,500

Otheremoluments 1,055,500 1,034,500 1,000 1,000

1,141,500 1,113,000 61,000 53,500

Non-executivedirectors:

Fees 321,750 290,250 255,000 230,000

Otheremoluments 77,000 66,000 69,000 59,000

398,750 356,250 324,000 289,000

1,540,250 1,469,250 385,000 342,500

Includedinemployeebenefitsexpensesanddirectors’remunerationarethefollowing:


2014RM

2015RM

2014RM

ContributionstoEPF:

Employeebenefitsexpenses 711,030 695,055 34,974 34,992

Directors'remuneration 4,500 58,500 - -

Rentalpaid 2,000 6,600 - -

Theestimatedmonetaryvalueofbenefits-in-kindreceivedandreceivablebyadirectorotherwisethanincashfromtheGroupamountedtoRM9,900(2014:RM9,900).

11. FINANCE COSTS

The Group2015RM

2014RM

Intereston:

Bankers'acceptances 15,289 38,000

LCcharges 12,164 24,297

Bank overdrafts 165 -

TotalinterestexpenseforfinancialliabilitiesnotclassifiedasatFVTPL 27,618 62,297




12. INCOME TAX EXPENSE AND DEFERRED TAX ASSETS AND LIABILITIES


2014RM

2015RM

2014RM

Taxexpensecomprises:

Currentincometaxexpense 4,959,785 2,623,221 190,000 218,000

Deferredtaxrelatingtoorigination and reversal of temporary differences (866,907) (432,300) - -

4,092,878 2,190,921 190,000 218,000

(Over)/Underprovisioninprioryears:

Incometax (372,394) (15,563) (15,496) 17,047

Deferredtax 123,753 (11,400) - -

3,844,237 2,163,958 174,504 235,047

TheGroup’sandtheCompany’sincometaxrateis25%fortheyearofassessment2015. TheFinance(No.2)Act2014,whichwasgazettedonDecember30,2014,enactsthereductionofthecorporate

incometaxratefrom25%to24%witheffectfromyearofassessment2016.Followingthis,theapplicabletaxratetobeusedforthemeasurementofanyapplicabledeferredtaxwillbetheabovementionedexpectedrate.




Thetotalincometaxexpensefortheyearcanbereconciledtotheaccountingprofitasfollows:


2014RM

2015RM

2014RM

Profitbeforetax 19,357,693 10,747,647 11,350,658 10,262,546

Taxattheapplicabletaxrateof25%(2014:25%) 4,839,000 2,687,000 2,838,000 2,566,000

Taxeffectsof:

Expensesthatarenotdeductibleindeterminingtaxableprofit 542,271 354,921 286,000 203,000

Unutilisedtaxlossesandunabsorbed capital allowances not recognisedasdeferredtaxasset 27,000 7,000 - -

Incomethatisnottaxableindeterminingtaxableprofit (1,050,000) (820,000) (2,934,000) (2,551,000)

Reductionindeferredtaxliability resultingfromreductionintax ratefrom25%to24% (245,393) - - -

Utilisationoftaxlossesandunabsorbed capital allowance previously not recognised as deferredtaxassets (20,000) (38,000)

4,092,878 2,190,921 190,000 218,000

(Over)/Underprovisioninprioryears:

Incometax (372,394) (15,563) (15,496) 17,047

Deferredtax 123,753 (11,400) - -

Incometaxexpenserecognisedinprofitorloss 3,844,237 2,163,958 174,504 235,047

Current tax assets and liabilities


2014RM

2015RM

2014RM

Current tax assets

Taxrecoverables 488 52,399 - -

Current tax liabilities

Incometaxpayable 706,850 681,704 32,074 41,204




12. INCOME TAX EXPENSE AND DEFERRED TAX ASSETS AND LIABILITIES (continued)

Deferred tax balances

The Group2015RM

2014RM

Deferred tax liabilities

At beginning of year (9,304,025) (9,888,725)

Recognisedinprofitorloss 816,154 584,700

At end of year (8,487,871) (9,304,025)

Thedeferredtaxliabilitiesareinrespectofthefollowing:

The Group2015RM

2014RM

Taxeffectsof:

Temporarydifferencesarisingfrom:

Property,plantandequipment (9,102,871) (9,783,025)

Inventories 12,000 14,000

Unabsorbedcapitalallowancesandunutilisedtaxlosses 603,000 465,000

(8,487,871) (9,304,025)

The Group2015RM

2014RM

Deferred tax assets

At beginning of year 431,000 572,000

Recognisedinprofitorloss (73,000) (141,000)

At end of year 358,000 431,000




Thedeferredtaxassetsareinrespectofthefollowing:

The Group2015RM

2014RM

Taxeffectsof:

Unabsorbedcapitalallowancesandunutilisedtaxlosses 361,000 434,000

Temporary differences arising from property, plant and equipment (3,000) (3,000)

358,000 431,000

As of June 30, 2015, certain subsidiary companies have unutilised investment tax allowance of RM910,000(2014:RM910,000)andunutilisedtaxlossesandunabsorbedcapitalallowancesamountingtoRM19,539,000(2014:RM19,444,000),whichareavailableforset-offagainstfuturetaxableprofit.

Unrecognised deferred tax assets

Thefollowingdeferredtaxassetshavenotbeenrecognisedattheendofthereportingperiod:

The Group2015RM

2014RM

Taxeffectsof:

Unabsorbedcapitalallowancesandunutilisedtaxlosses 3,766,000 3,924,000

Investmenttaxallowances 219,000 228,000

3,985,000 4,152,000

13. EARNINGS PER ORDINARY SHARE OF RM0.50 EACH - GROUP

ThebasicanddilutedearningsperordinaryshareofRM0.50eacharecalculatedasfollows:

2015 2014

ProfitfortheyearattributabletoownersoftheCompany RM14,030,207 RM8,079,200

Weighted average number of ordinary sharesofRM0.50eachinissueatbeginningandendofyear 200,380,036 200,380,036

Basic and fully diluted

EarningsperordinaryshareofRM0.50each(sen) 7.0 4.0




14. PROPERTY, PLANT AND EQUIPMENT

The Group

Land and buildings

RM

Plant, machinery

and equipment

RM

Furniture, fixtures

and office equipment

RM

Motor vehicles

and forkliftsRM

Capital work-in-progress

RMTotalRM

CostAsofJuly1,2013 48,799,487 106,791,952 2,171,236 2,173,287 254,068 160,190,030

Additions - 86,289 62,418 368,000 488,843 1,005,550

Write offs - (15,888) (2,699) - - (18,587)

Reclassification - 462,593 - - (462,593) -

AsofJune30,2014 48,799,487 107,324,946 2,230,955 2,541,287 280,318 161,176,993

Additions 44,850 90,179 75,296 - 152,687 363,012

Write offs (3,172) (82,766) (46,526) - - (132,464)

Reclassification - 23,100 29,400 - (52,500) -

As of June 30, 2015 48,841,165 107,355,459 2,289,125 2,541,287 380,505 161,407,541

Accumulated depreciation

AsofJuly1,2013 11,130,411 75,315,379 1,868,713 1,779,092 - 90,093,595

Depreciationchargefor the year 995,718 4,108,108 132,668 211,873 - 5,448,367

Write offs - (9,610) (2,394) - - (12,004)

AsofJune30,2014 12,126,129 79,413,877 1,998,987 1,990,965 - 95,529,958

Depreciationchargefor the year 928,042 3,266,444 104,699 210,483 - 4,509,668

Write offs (1,146) (59,769) (46,516) - - (107,431)

As of June 30, 2015 13,053,025 82,620,552 2,057,170 2,201,448 - 99,932,195

Accumulated impairment loss

AsofJuly1,2013/June30,2014/June30,2015 - 3,137,701 - - - 3,137,701

Carrying amountsAs of June 30, 2015 35,788,140 21,597,206 231,955 339,839 380,505 58,337,645

AsofJune30,2014 36,673,358 24,773,368 231,968 550,322 280,318 62,509,334



LandandbuildingsoftheGroupconsistof:

The Group

FreeholdlandRM

Long-term Lease Land

RM

Short-termLease Land

RM

Buildings and improvements

RMTotalRM

CostAsofJuly1,2013 15,385 15,389,000 8,086,400 25,308,702 48,799,487

Additions

Write offs

AsofJune30,2014 15,385 15,389,000 8,086,400 25,308,702 48,799,487

Additions 44,850 44,850

Write offs - - - (3,172) (3,172)

Reclassification - (5,859,000) 5,859,000 - -

As of June 30, 2015 15,385 9,530,000 13,945,400 25,350,380 48,841,165

Accumulated depreciationAsofJuly1,2013 - 496,112 359,521 10,274,778 11,130,411

Depreciationchargefor the year - 247,724 179,780 568,214 995,718

AsofJune30,2014 - 743,836 539,301 10,842,992 12,126,129

Depreciationchargefor the year - 247,724 179,778 500,540 928,042

Write offs - - - (1,146) (1,146)

Reclassification - (455,041) 455,041 - -

As of June 30, 2015 - 536,519 1,174,120 11,342,386 13,053,025

Carrying amountsAs of June 30, 2015 15,385 8,993,481 12,771,280 14,007,994 35,788,140

AsofJune30,2014 15,385 14,645,164 7,547,099 14,465,710 36,673,358





14. PROPERTY, PLANT AND EQUIPMENT (continued)

Furniture, fixtures andoffice equipment

The Company2015RM

2014RM

Cost

AsofJuly1,2014/July1,2013 48,392 45,017

Additions 7,075 4,130

Write offs (14,590) (755)

AsofJune30,2015/June30,2014 40,877 48,392

Accumulated depreciationAsofJuly1,2014/July1,2013 41,787 37,873

Depreciationchargefortheyear 4,741 4,667

Write offs (14,587) (753)

AsofJune30,2015/June30,2014 31,941 41,787

Carrying amount 8,936 6,605

LeaseholdlandandbuildingsoftheGroupwithcarryingvaluesofRM13,567,995(2014:RM13,876,990)wascharged to a licensed bank to secure the banking facilities of certain subsidiary companies as disclosed in Note 26.ThechargecreatedfromtheleaselandandbuildingsoftheGroupwithcarryingvaluesofRM10,373,970(2014:RM10,616,535)hasbeendischargedaftertheendofthereportingperiod.

15. INVESTMENT IN SUBSIDIARY COMPANIES

The Company2015RM

2014RM

Unquotedshares-atcost 84,691,442 84,659,442

Less:Accumulatedimpairment (15,800,694) (15,800,694)

68,890,748 68,858,748




Thesubsidiarycompanies,allofwhichareincorporatedinMalaysiaareasfollows:

EffectiveEquity Interest

Name of Company2015

%2014

% Principal Activities

Bio-AceticProductsSdn.Bhd. #100.00 #99.91 Manufacture and sale of natural vinegar.

ChemicalIndustries(Malaya)Sdn.Bhd. 100.00 99.91 Manufacture and sale of ethyl alcohol, liquefiedcarbondioxideandkaoliangwine.

Hexza-MatherSdn.Bhd. 100.00 100.00 Manufacture and sale of alcoholic and non-alcoholic beverages. Temporarily ceasedoperationsinfinancialyear2012.

HexzachemSarawakSdn.Bhd. 80.00 80.00 Manufacture and sale of formaldehyde and formaldehyde based adhesive and resins for timber related industries.

Norsechem Marketing Sdn. Bhd. 100.00 100.00 Marketing and distribution of consumer products and industrial chemicals.

NorsechemResinsSdn.Berhad 100.00 100.00 Manufacture and sale of formaldehyde and formaldehyde based adhesive and resins for timber related industries. Ceased operations after the end of the reporting period.

SummitDevelopmentCorporationSdn.Berhad 100.00 100.00 Propertydevelopment.

SyntheticBakelites(Malaysia)Sdn.Bhd. 96.92 96.92 Dormant.

TrizenithSdn.Bhd. 100.00 100.00 Dormant.

HexzaWorldTradeSdn.Bhd. 70.00 70.00 Dormant.

NC Management Services Sdn. Bhd. 100.00 100.00 Pre-operating.

Norse-MedDevicesSdn.Bhd. 100.00 100.00 Pre-operating.

NorsechemPolymerSdn.Bhd. 100.00 100.00 Pre-operating.

# IndirectinterestviatheCompany’sinvestmentinChemicalIndustries(Malaya)Sdn.Bhd..




15. INVESTMENT IN SUBSIDIARY COMPANIES (continued) Composition of the Group

InformationaboutcompositionoftheGroupattheendofthereportingperiodisasfollows:

Principal activity

Place of incorporation and operation

Number of wholly-owned subsidiaries

2015 2014

Manufacture of natural vinegar. Malaysia 1 -

Manufacture and sale of ethyl alcohol, liquefiedcarbondioxideandkaoliangwine. Malaysia 1 -

Marketing and distribution of consumer products and industrial chemicals. Malaysia 1 1

Manufacture and sale of formaldehyde andformaldehyde based adhesive and resins fortimber related industries. Malaysia 1 1

Propertydevelopment. Malaysia 1 1

Dormant/Pre-operating. Malaysia 5 5

10 8

Principal activity

Place of incorporation and operation

Number of non-wholly-owned subsidiaries

2015 2014

Manufacture of natural vinegar. Malaysia - 1

Manufacture and sale of ethyl alcohol,liquefiedcarbondioxideandkaoliangwine. Malaysia - 1

Manufacture and sale of formaldehyde andformaldehyde based adhesive and resinsfor timber related industries. Malaysia 1 1

Dormant. Malaysia 2 2

3 5

Detailsofnon-whollyownedsubsidiariesthathavematerialnon-controllinginterestsareasfollows:

Name of subsidiary

Place of incorporation and principal

place of business

Proportion of ownership

interest and voting rights held by

non-controlling interests

Profit allocated tonon-controlling

interests

Accumulatednon-controlling

interests2015

%2014

%2015

RM2014

RM2015

RM2014

RM

HexzachemSarawak Sdn. Bhd.(“HCSSB”) 20 20 1,479,728 501,380 6,795,003 6,530,275

Individuallyimmaterialsubsidiarywithnon-controllinginterests 2,156 36,997

6,797,159 6,567,272




SummarisedfinancialinformationinrespectoftheGroup’ssubsidiary,thathasmaterialnon-controllinginterests,HCSSB, issetoutbelow.Thesummarisedfinancial informationbelow representsamountsbefore intragroupeliminations.

HCSSB 2015RM

2014RM

Current assets 26,102,362 27,583,539

Non-current assets 18,481,338 20,011,805

Current liabilities (7,974,251) (11,903,380)

Non-current liabilities (2,634,439) (3,040,593)

Equity attributable to owners of the Company (27,180,007) (26,121,096)

Non-controlling interests (6,795,003) (6,530,275)

2015RM

2014RM

Revenue 69,696,285 67,283,632

Income 28,649 80,586

Expenses (62,326,295) (64,857,318)

Profitandtotalcomprehensiveincomefortheyear 7,398,639 2,506,900

Profitandtotalcomprehensiveincomeattributable to owners of the Company 5,918,911 2,005,520

Profitandtotalcomprehensiveincomeattributable to non-controlling interests 1,479,728 501,380

Profitandtotalcomprehensiveincomefortheyear 7,398,639 2,506,900

Dividendspaidtonon-controllinginterests 1,215,000 810,000

Netcashfrom/(usedin)operatingactivities 9,498,023 (163,699)

Net cash used in investing activities (57,954) (35,475)

Netcashusedinfinancingactivities (9,675,000) (450,000)

Netcashoutflow (234,931) (649,174)



16. OTHER INVESTMENTS


2014RM

2015RM

2014RM

Atfairvalue:

Shares quoted in Malaysia 40,106,220 44,604,661 40,086,020 44,585,061

Warrants quoted in Malaysia 296,984 249,585 296,984 249,585

Shares quoted outside Malaysia 2,540,847 3,442,832 2,540,847 3,442,832

Medium term note - unquoted - 5,130,500 - 5,130,500

42,944,051 53,427,578 42,923,851 53,407,978

Atcost:

Unquotedshares 3,880,800 3,880,800 3,880,800 3,880,800

46,824,851 57,308,378 46,804,651 57,288,778

Themediumtermnotehasbeencalledduringthefinancialyear.Ithasatermof10years(non-call5years)andbearinterestatarateof7.25%perannumforthefirsttofifthyears,and8.25%perannumforthesixthtotenthyears.Interestwaspaidonhalf-yearlybasis.

17. GOODWILL ARISING ON CONSOLIDATION

The Group2015RM

2014RM

Goodwillarisingonconsolidation 2,129,365 2,129,365

Impairment tests for cash-generating units (“CGU”) containing goodwill The carrying amount of goodwill is allocated to the manufacturing and related sales functions of Chemical

Industries(Malaya)Sdn.Bhd.andHexzachemSarawakSdn.Bhd..

During the financial year, theGroupcarriedout a reviewof the recoverableamountof theCGUscontaininggoodwill.TherecoverableamountofaCGUisdeterminedbasedonvalue-in-usecalculations.Thesecalculationsusecashflowprojectionsbasedonafinancial forecast,approvedbymanagement, coveringaperiodof fiveyearsfromthefinancialyears2016to2020.Thefollowingkeyassumptionswereusedtogeneratethefinancialforecast:

Sales volume growth rate 5.0%to16.0%perannumInflationrate 5.0%perannumDiscountrate 8.0%

Receivablesandpayablesturnoverperiodswereestimatedtobeconsistentwiththecurrentfinancialyear.

The above key assumptions were determined based on past business performances and management’sexpectationsoffuturemarketdevelopment.

NoimpairmentlosswasrecognisedduringthefinancialyearastherecoverableamountsoftheCGUsexceedtheir carrying amounts, including the goodwill allocated.





18. INVENTORIES

The Group2015RM

2014RM

Rawmaterialsandconsumables 12,104,098 11,564,904

Finished goods 6,573,301 5,116,411

Goods-in-transit 3,034,507 3,318,672

Completed development units for sale 77,397 77,397

Work-in-progress 4,374 19,899

21,793,677 20,097,283

ThecostofinventoriesrecognisedasanexpenseduringthefinancialyearfortheGroupwasRM117,611,145(2014:RM121,517,029).

Raw materials and consumables used in the Group includes inventories written off of RM82,143 (2014:RM204,666).

19. TRADE AND OTHER RECEIVABLES


2014RM

2015RM

2014RM

Trade receivables 33,238,821 35,570,472 - -

Less:Allowancefordoubtfuldebts (709,423) (378,169) - -

Net receivables from third parties 32,529,398 35,192,303 - -

Otherreceivables 119,110 143,706 14,153 114,378

Net amount owing by subsidiary companies(Note20) - - 85,645 5,657,703

32,648,508 35,336,009 99,798 5,772,081

Trade receivables comprise amounts receivable for sale of goods. The credit periods granted on sale of goods rangedfrom30to150days(2014:30to150days).Allowanceshavebeenmadeforestimated irrecoverableamountsfromsaleofgoodsoftheGroupofRM709,423(2014:RM378,169),andhavebeendeterminedbasedon estimates of possible losses which may arise from non-collection of certain receivable accounts.



19. TRADE AND OTHER RECEIVABLES (continued)

Movementsinallowancefordoubtfuldebtsareasfollows:

The Group2015RM

2014RM

Trade receivables

Balance at beginning of year 378,169 378,169

Allowancefordoubtfuldebts(Note9) 331,254 -

Balance at end of year 709,423 378,169

The Company2015RM

2014RM

Amount owing by subsidiary companies

Balance at beginning of year 9,746,973 9,733,380

Allowancefordoubtfuldebts(Note9) - 13,593

Balanceatendofyear(Note20) 9,746,973 9,746,973

IncludedinallowancefordoubtfuldebtsareindividuallyimpairedreceivablesamountingtoRM709,423(2014:RM378,169) relating to trade receivables for the Group, and RM9,746,973 (2014: RM9,746,973) relating toamount owing by subsidiary companies for the Company. The impairment recognised represents the difference betweenthecarryingamountofthesereceivablesandthepresentvalueofexpectedcollections.

The ageing of the impaired receivables as mentioned above is more than one year.

Thecurrencyprofileoftradereceivablesisasfollows:

The Group2015RM

2014RM

RinggitMalaysia 33,238,821 35,023,906

SingaporeDollar - 546,566

33,238,821 35,570,472

IncludedintradeandotherreceivablesoftheGrouparereceivableswithtotalcarryingamountsofRM7,261,073andRM204(2014:RM5,081,037andRM204)respectivelywhicharepastdueattheendofthereportingperiodforwhichtheGrouphasnotprovidedfor impairment loss.TheGroupdoesnotholdanycollateralover thesebalancesnordoesithavealegalrighttooffsetagainstanyamountsowedbytheGrouptothecounterparties.





Ageing of trade and other receivables which are past due but not impaired as at the end of the reporting period isasfollows:

The Group2015RM

2014RM

Trade receivables

Numberofdayspastdue:

1-30days 3,821,891 3,374,544

31-60days 1,095,314 1,321,117

61-90days 705,983 60,383

91-120days 1,574,384 35,824

Morethan120days 63,501 289,169

7,261,073 5,081,037

Other receivables

Numberofdayspastdue:

1-30days - -

Morethan120days 204 204

204 204

TheGroupseekstomaintainstrictcontroloveritsoutstandingtradereceivablesandhasacreditperiodpolicytominimisecreditrisk.Overduebalancesarereviewedregularlybymanagement.TheGrouphasnotprovidedforimpairmentlossonthesetradereceivableaccountsthatarepastdueastherehasnotbeenanysignificantchange in credit quality and the amounts are still considered recoverable.

TransactionswithrelatedpartiesaredisclosedinNote20.

20. RELATED COMPANIES AND RELATED PARTY TRANSACTIONS

Subsidiary companies

The Company2015RM

2014RM

Amountsowingbysubsidiarycompanies(Note19)consistof:

Current accounts 9,832,618 9,904,676

Loanaccounts - 5,500,000

9,832,618 15,404,676

Allowancefordoubtfuldebts(Note19) (9,746,973) (9,746,973)

85,645 5,657,703

Amountowingtoasubsidiarycompany(Note25)consistsof:Current accounts 70,794 72,217




20. RELATED COMPANIES AND RELATED PARTY TRANSACTIONS (continued)

Theamountsowingby/(to)subsidiarycompaniesclassifiedundercurrentaccountsarosemainlyfromexpensespaid on behalf and advances which are unsecured, interest-free and are repayable on demand.

Theamountsowingbysubsidiarycompaniesclassifiedunder loanaccountsbear interestata rateof6.60%(2014:6.60%)perannum.

Duringthefinancialyear,transactionsundertakenbytheCompanywithitssubsidiarycompaniesareasfollows:

The Company2015RM

2014RM

Grossdividendsreceived/receivable 7,627,650 6,997,000

Loangranted 7,000,000 5,500,000

Interestreceived(Note7) 119,619 122,607

Professionalservicesrendered 42,955 50,650

The transactions with subsidiary companies are aggregated as these transactions are similar in nature and also no singletransactionissignificantenoughtobedisclosedseparatelyinthefinancialstatements.

Related party transactions

Other thanasdisclosedelsewhere in the financial statements, the relatedpartyand its relationshipwith theCompanyanditssubsidiarycompaniesareasfollows:

Name of related party Relationship

SP&GInsuranceBrokersSdn.Bhd.(ceasedtobearelatedpartyinJanuary2014)

)))

A company in which certain directors of the Company had substantial financial interests, and where a director of the Company was also a director.

Duringthefinancialyear,relatedpartytransactionsareasfollows:


2014RM

2015RM

2014RM

Insurance premium paid/payableSP&GInsuranceBrokersSdn.Bhd. - 870,242 - 65,109

Compensation of key management personnel

Directors’remunerationareasdisclosedinNote10.

Theremunerationofthemanagementpersonnelotherthanthedirectorsareasfollows:

The Group2015RM

2014RM

Short-termemployeebenefits 1,810,212 1,617,441

Theestimatedmonetaryvalueofbenefits-in-kind receivedand receivableby thekeymanagementpersonnelotherwisethanincashfromtheGroupamountedtoRM37,687(2014:RM42,073).




21. OTHER ASSETS


2014RM

2015RM

2014RM

Progresspayments 19,671,600 - 19,671,600 -

Refundabledeposits 141,058 144,358 2,030 2,030

Prepaidexpenses 201,810 182,396 14,075 18,746

20,014,468 326,754 19,687,705 20,776

During the financial year, the Group and the Company havemade progress payments of RM19,671,600 toTembusuIndustriesPte.Ltd.(“TIPL”)fortheacquisitionofequipmentforaPowerGenerationSystemunderasaleandleaseagreemententeredintoonJanuary30,2015.Underthesaidagreement,theequipmentistobeleasedbacktoTIPLforaperiodof10yearswithtotalagreedrentalfortheentireleaseperiodofUSD15,624,600.

22. CASH AND CASH EQUIVALENTS


2014RM

2015RM

2014RM

Investmentfunds 40,259,217 45,870,220 37,591,299 43,190,325

Fixedandshort-termdepositswithlicensed banks 11,988,702 17,406,200 11,988,702 12,906,200

Cash and bank balances 9,902,092 9,988,551 3,152,053 417,946

62,150,011 73,264,971 52,732,054 56,514,471

TheabovebalancesrepresentcashandcashequivalentsoftheGroupandoftheCompany.

Theinterestratesandreturnofinvestmentareasfollows:

The Group The Company2015

%2014

%2015

%2014

%

Fixeddeposits 1.20 - 3.60 2.00-3.60 2.95 - 3.60 2.95-3.60

Investmentfunds 2.82 - 5.05 2.34-3.44 2.82 - 5.05 2.63-3.44

ThematurityperiodsofthedepositsoftheGroupandoftheCompanyrangefrom3daysto6months(2014:1dayto6months).




23. SHARE CAPITAL

<--------------------------- The Group and The Company --------------------------->2015

Number of ordinary shares

2014Number of ordinary shares

2015RM

2014RM

Authorised:OrdinarysharesofRM0.50each 400,000,000 400,000,000 200,000,000 200,000,000

Issued and fully paid:OrdinarysharesofRM0.50each 200,380,036 200,380,036 100,190,018 100,190,018

24. RESERVES


2014RM

2015RM

2014RM

Non-distributable reserve:Investmentsrevaluationreserve 2,260,390 5,691,223 2,253,710 5,685,143

Distributable reserve:Retainedearnings 115,583,732 109,562,364 85,281,096 82,120,143

117,844,122 115,253,587 87,534,806 87,805,286

Movementintheinvestmentsrevaluationreserveisshowninthestatementsofchangesinequityonpages40to41.

TheentireretainedearningsoftheCompanyisavailablefordistributionsassingletiertax-exemptdividendtothe shareholders of the Company.

25. TRADE AND OTHER PAYABLES


2014RM

2015RM

2014RM

Trade payables 6,018,681 10,852,582 - -

Otherpayables 1,390,916 1,736,108 17,160 8,200

7,409,597 12,588,690 17,160 8,200

Amount owing to a subsidiary company(Note20) - - 70,794 72,217

7,409,597 12,588,690 87,954 80,417




Thecurrencyprofileoftradeandotherpayablesisasfollows:


2014RM

2015RM

2014RM

RinggitMalaysia 6,650,106 12,588,690 87,954 80,417

UnitedStatesDollar 759,491 - - -

7,409,597 12,588,690 87,954 80,417

Trade and other payables comprise amounts outstanding for trade purchases and ongoing costs respectively. The creditperiodsgrantedtotheGroupfortradepurchasesrangedfrom1to90days(2014:1to90days).

TransactionswithrelatedpartiesareasdisclosedinNote20.

26. SHORT-TERM BORROWINGS

The Group2015RM

2014RM

Bankers'acceptances - 3,600,000

TheGrouphasbankoverdraftandothercreditfacilitiesobtainedfromlicensedbankstotheextentofRM54,300,000(2014:RM31,500,000)whicharesecuredbypledgesovertheleaseholdlandandbuildingsoftheGroupasdisclosedinNote14,anegativepledgeontheassetsofthesubsidiarycompaniesandguaranteedbytheCompany.Thebankoverdraftfacilitiesbearinterestatarateof7.85%(2014:7.85%)perannum.Theothercreditfacilitiesbearinterestatratesrangingfrom1.00%to8.10%(2014:4.30%to8.10%)perannum.

27. DIVIDENDS

<--------------------------- The Group and The Company --------------------------->Net dividend per share

2015RM

2014RM

2015Sen

2014Sen

Recognisedduringthefinancial year:

Firstandfinaldividendpaid:8.0%single-tierfor2014(2013:8.0%lesstaxand2.0%taxexempt) 8,015,201 8,015,201 4.00 4.00

Thedirectorshaveproposedafirstandfinalsingle-tierdividendof9.0%inrespectofthecurrentfinancialyear.TheproposeddividendsaresubjecttoapprovalbytheshareholdersattheforthcomingAnnualGeneralMeetingoftheCompanyandhavenotbeenincludedasaliabilityinthefinancialstatements.




28. CAPITAL COMMITMENTS

AsofJune30,2015,theGrouphasthefollowingcommitmentsoncapitalexpenditureinrespectofproperty,plantandequipment:

The Group2015RM

2014RM

Contracted but not provided for 97,484 151,932

Approved but not contracted for 209,399 483,000

306,883 634,932

29. SUBSEQUENT EVENTS Oneofthesubsidiarycompanies,NorsechemResinsSdn.Berhad,hasonJuly8,2015enteredintoasaleand

purchaseagreementwithCrystalDignity(M)Sdn.Bhd.(“CDSB”)forthedisposalofleaseholdindustriallandandbuildingswithtotalcarryingvalueofapproximatelyRM10.4milliontoCDSBforatotalconsiderationofRM17.0million.

30. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT

Categories of financial instruments


2014RM

2015RM

2014RM

Financial assets

Loansandreceivables:

Trade and other receivables 32,648,508 35,336,009 14,153 114,378

Refundabledeposits 141,058 144,358 2,030 2,030

Amount owing by subsidiary companies - - 85,645 5,657,703

Cash and bank balances andfixedandshort-termdeposits 21,890,794 27,394,751 15,140,755 13,324,146

Available-for-sale:

Otherinvestments 46,824,851 57,308,378 46,804,651 57,288,778

Atfairvaluethroughprofitorloss:Investmentfunds 40,259,217 45,870,220 37,591,299 43,190,325

Financial liabilities

Otherfinancialliabilities:

Trade and other payables 7,409,597 12,588,690 17,160 8,200

Amount owing to a subsidiary company - - 70,794 72,217

Accruedexpenses 2,821,396 3,270,197 379,040 344,534

Short-term borrowings - 3,600,000 - -




(a) Financial Risk Management Objectives and Policies

RiskmanagementisintegraltothewholebusinessoftheGroupandoftheCompany.Managementcontinually monitorstheGroup’sandtheCompany’sriskmanagementprocessestoensurethatanappropriatebalance betweenriskandcontrolisachieved.Riskmanagementpoliciesandsystemsarereviewedregularlytoreflect changesinthemarketconditionsandtheGroup’sandtheCompany’sactivities.

There have been no changes to theGroup’s and theCompany’s exposure to these financial risks or the manner in which they manage and measure the risk.

Foreign currency risk management

TheGroupandtheCompanyhaveminimalforeigncurrencytransactions.Assuch,managementconsiders theexposuretoforeigncurrencyrisktobeminimalandhasnosignificantimpacttothefinancialresultsof theGroupandoftheCompany.

Market risk management TheGroup and theCompany have in place policies tomanage theGroup’s exposure to fluctuations in

pricesofkeyrawmaterialsandconsumablesusedinoperationsthroughmanagement’sconstantsurveyon marketpricesanditsawarenessofmarkettrends.Formarketablesecurities,theGroupandtheCompanyuse aninvestmentcommitteetomonitorfluctuationsinmarketpricesandtoestablishsuitablecutlossprocedures.

Credit risk management

Creditriskreferstotheriskthatacounterpartywilldefaultonitscontractualobligationsresultinginfinancial losstotheGroupandtotheCompany.

Themaximumexposure tocredit risk in theevent that thecounterparties fail toperformtheirobligations at theendof the reportingperiod in relation toeachclassof recognisedfinancial assets is thecarrying amountofthoseassetsasstatedinthestatementsoffinancialposition.TheGroupandtheCompanydonot hold any collateral on the balance outstanding.

The Group and the Company establish policies on credit control which involves comprehensive credit evaluations, setting up appropriate credit limits, ensuring the sales are made to customers with good credit history and regular review of customers’ outstanding balances and payment trends. TheGroup and the Company consider the risk of material loss in the event of non-performance by the customers to be unlikely.

ConcentrationofcreditriskoftheGrouprelatestoamountsowingby3(2014:3)majorcustomerswhich constitutedapproximately47%(2014:35%)of the total trade receivablesof theGroupat theendof the reportingperiod.ThesetradereceivablesareregularcustomersthathavebeentransactingwiththeGroup. TheGroup uses ageing analysis tomonitor the credit quality of the trade receivables. Any receivables havingsignificantbalancespastdueormorethan90days,whicharedeemedtohavehighercreditrisk,are monitored individually.

Thecreditriskonliquidfundsislimitedbecausethecounterpartiesarelicensedfinancial institutionswith high credit standings.

Interest rate risk management

Interest rate risk is the risk that the fairvalueor futurecashflowsof theGroup’sandof theCompany’s financial instrumentswill fluctuate becauseof changes inmarket interest rates. TheGroupmanages its interestrateexposurebymaintainingaprudentmixoffixedandfloatingrateborrowings.

Sensitivity analysis for interest rate risk

NosensitivityanalysiswaspresentedbytheGroupforthecurrentfinancialyearastherewasnointerest- bearing borrowings as of the end of the current reporting period.




30. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (continued) At the end of the previous reporting period, if interest rates increased/decreased by 50 basis pointswith all

other variablesheld constant, theGroup’sprofit net of taxwouldhavebeen RM13,500 lower/higher arising mainly as a result of higher/lower interest expense on floating rate borrowings. The assumedmovement in the interest rates for interest rate sensitivity analysis was based on the observable market environment.

Other price risks

The Group and the Company are exposed to equity price risks arising from equity investments. Equity investments are held for both strategic and trading purposes.

Equity price sensitivity analysis

The sensitivity analysis below has been determined based on the exposure to equity price risks at the end of the reporting period.

Ifequitypriceshadbeen5%(2014:5%)higher/lower,theGroup’sandtheCompany’s:

• net profit for the year ended June 30, 2015 would have been unaffected as the equity investments areclassifiedasavailable-for-saleandnoinvestmentsareexpectedtobeimpaired;and

• investments revaluation reserve would increase/decrease by RM2,147,203 and RM2,146,193 (2014: RM2,671,379andRM2,670,399)respectivelyasaresultofthechangesinfairvalueofavailable-for-sale investments. TheGroup’sandtheCompany’ssensitivity toequitypriceshavenotchangedsignificantly from the prior year.

Liquidity and cash flow risks management

TheGrouppractisesprudentliquidityriskmanagementtominimisethemismatchoffinancialassetsandfinancialliabilitiesandtomaintainsufficientcreditfacilitiesforcontingentfundingrequirementofworkingcapital.

TheGroup’sandtheCompany’sprincipalsourceofliquidityhavehistoricallybeencashflowsfromoperationsand funds obtained from long and short-term borrowings.

TheGroupandtheCompanyexpectthatthecashgeneratedfromtheiroperations,theirexistingcreditfacilitiesandthetradetermsprovidedbytheirsupplierswillbesufficienttomeettheGroup’sandtheCompany’scurrentlyanticipatedcapitalexpenditureandworkingcapitalneedsforatleastthenext12months.

TheGrouphascreditfacilitiesofapproximatelyRM54,300,000(2014:RM31,500,000),ofwhichonlyRM6,477,700(2014:RM14,317,000) has been utilised for bank guarantees and trade facilities at the end of the reportingperiod.TheGroupandtheCompanyexpecttomeettheirfinancialobligationsfromtheiroperatingcashflowsandproceedsfrommaturingfinancialassets.

Allnon-derivativefinancialassetsandfinancialliabilitiesarerepayableondemandorduewithinoneyearfromthe end of the reporting period.

Capital risk management

TheGroupandtheCompanymanagetheircapitaltoensuretheGroupandtheCompanywillbeabletocontinueas a going concernwhilemaximising the return to stakeholders through the optimisation of debt and equitybalance.TheGroup’sandtheCompany’soverallstrategyremainunchangedfrom2014.

Thecapitalstructureof theGroupandof theCompanyasof theendof thecurrent reportingperiodconsistssolelyofequityoftheGroupandoftheCompany.TheGroupandtheCompanyarenotsubjecttoanyexternallyimposed capital requirements.




(b) Fair Values of Financial Assets and Financial Liabilities ThecarryingamountsandtheestimatedfairvaluesoftheGroup’sandoftheCompany’sfinancialinstruments

areasfollows:


Note

CarryingAmount

RM

FairValue

RM

CarryingAmount

RM

FairValue

RM

As of June 30, 2015Financial assets at FVTPLInvestmentfunds 22 40,259,217 40,259,217 37,591,299 37,591,299

Available-for-sale ("AFS")

financial assetsOtherinvestments

- unquoted shares 16 3,880,800 * 3,880,800 *

- quoted shares and warrants 16 42,944,051 42,944,051 42,923,851 42,923,851

As of June 30, 2014Financial assets at FVTPLInvestmentfunds 22 45,870,220 45,870,220 43,190,325 43,190,325

Available-for-sale(“AFS”)

financial assetsOtherinvestments

- unquoted shares 16 3,880,800 * 3,880,800 *

- quoted shares and warrants 16 48,297,078 48,297,078 48,277,478 48,277,478

- medium term note 16 5,130,500 5,130,500 5,130,500 5,130,500

The fair values of quoted shares and warrants are determined based on open market prices as at the end of thereportingperiodandapproximatetheircarryingamounts.

The fair value of the medium term note in the prior year was determined using its Mark-to-Market price as at the end of the previous reporting period.

Thefairvalueofinvestmentfundsisdeterminedusingtheinvestmentfunds’netassetvalueperunitasat

the end of the reporting period

* It is not practical to estimate the fair values of unquoted investments. As of year end, based on themanagementfinancialstatements,theGroup’sandtheCompany’sshareofthenettangibleassets oftheunquotedinvestmentsamountedtoapproximatelyRM4,196,000(2014:RM4,121,000).

Thecarryingamountsofothershort-termfinancialassetsandfinancialliabilitiesasreportedinthestatements offinancialpositionapproximatetheirfairvaluesduetotheshort-termmaturityoftheseinstruments.




30. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (continued)

(c) Fair value measurements recognised in the statements of financial position

The following table provides an analysis of financial instruments that are measured subsequent to initial recognitionatfairvalue,groupedintoLevels1to3basedonthedegreetowhichthefairvalueisobservable.

The Group2015

Level 1RM

Level 2RM

Level 3RM

TotalRM

Financial assets at FVTPLInvestmentfunds - 40,259,217 - 40,259,217

AFS financial assetsOtherinvestments

- unquoted shares - - 3,880,800 3,880,800

- quoted shares and warrants 42,944,051 - - 42,944,051

42,944,051 40,259,217 3,880,800 87,084,068

The Group2014



- unquoted shares - - 3,880,800 3,880,800


- medium term note - 5,130,500 - 5,130,500

48,297,078 51,000,720 3,880,800 103,178,598




The Company2015

Level 1RM

Level 2RM

Level 3RM

TotalRM



- unquoted shares - - 3,880,800 3,880,800- quoted shares and warrants 42,923,851 - - 42,923,851

42,923,851 37,591,299 3,880,800 84,395,950

The Company2014



- unquoted shares - - 3,880,800 3,880,800


- medium term note - 5,130,500 - 5,130,500

48,277,478 48,320,825 3,880,800 100,479,103

TherewerenotransfersbetweenLevels1and2duringthefinancialyear.

Significantassumptionsusedindeterminingfairvaluesoftheabovefinancialassetsareasdisclosedin(b) above.




31. SUPPLEMENTARY INFORMATION - DISCLOSURE ON REALISED AND UNREALISED PROFITS OR LOSSES

ThebreakdownoftheretainedearningsoftheGroupandoftheCompanyasofJune30,2015intorealisedandunrealisedprofitsorlosses,pursuanttothedirectiveissuedbyBursaMalaysiaSecuritiesBerhadonMarch25,2010,isasfollows:


2014RM

2015RM

2014RM

Total retained earnings ofthe Company andits subsidiary companies

Realised 109,113,295 103,546,807 85,281,096 82,120,143

Unrealised 6,470,437 6,015,557 - -

Total retained earnings as per statements of financial position 115,583,732 109,562,364 85,281,096 82,120,143

Thedeterminationof realisedandunrealisedprofitsor losses isbasedonGuidanceofSpecialMatterNo.1“Determination ofRealised andUnrealisedProfits or Losses in theContext ofDisclosurePursuant toBursaSecuritiesListingRequirements”asissuedbytheMalaysianInstituteofAccountantsonDecember20,2010.

This supplementary information has been made solely for complying with the disclosure requirements as stipulated in the directives of Bursa Malaysia and is not made for any other purposes.



The directors of HEXZA CORPORATION BERHAD state that, in their opinion, the accompanying financial statements are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial ReportingStandards and the provisions of theCompaniesAct, 1965 inMalaysia so as to give a true and fair view of thefinancialpositionoftheGroupandoftheCompanyasofJune30,2015andofthefinancialperformanceandthecashflowsoftheGroupandoftheCompanyfortheyearendedonthatdate.

Thesupplementary informationsetout inNote31,which isnotpartof thefinancialstatements, isprepared inallmaterialrespects,inaccordancewithGuidanceonSpecialMatterNo.1“DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements”asissuedbytheMalaysianInstituteofAccountantsandthedirectiveofBursaMalaysiaSecuritiesBerhad.

SignedinaccordancewitharesolutionoftheDirectors,

DATUK DR. FOONG WENG SUM

DATO' RICHARD ONG GUAN SENG

Ipoh,30thSeptember2015

DECLARATION BY THE OFFICER PRIMARILY RESPONSIBLE FOR THE FINANCIAL MANAGEMENT OF THE COMPANY

STATEMENT BY DIRECTORS

I,CHONG YOKE SENG,theofficerprimarilyresponsibleforthefinancialmanagementofHEXZA CORPORATION BERHAD,dosolemnlyandsincerelydeclarethattheaccompanyingfinancialstatementsare,inmyopinion,correctandImakethissolemndeclarationconscientiouslybelievingthesametobetrue,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.

CHONG YOKE SENG

Subscribed and solemnly declared by the abovenamedCHONG YOKE SENG at IPOHthis30thSeptember2015.

Before me,

CHOW MIN YEECommissioner For OathsIpoh



STATEMENT OF SHAREHOLDINGS AS AT 30TH SEPTEMBER 2015

AuthorisedCapital : RM200,000,000Issued&FullyPaid-UpCapital : RM100,190,018ClassofShares : OrdinarySharesof50seneachVotingRights : OnevoteperOrdinaryShare

DISTRIBuTION OF SHAREHOLDINGS

Range of ShareholdingsNo. of

Holders% of

HoldersNo. of 50 Sen

Shares% of Issued

Capital

Lessthan100 120 1.47 5,610

100–1,000 375 4.59 234,942 0.12

1,001–10,000 5,691 69.73 23,052,632 11.50

10,001–100,000 1,797 22.02 51,251,356 25.58

100,001tolessthan5%ofissuedshares 178 2.18 65,253,839 32.57

5%andaboveofissuedshares

TOTAL 8,162

SuBSTANTIAL SHAREHOLDERS AS PER THE REGISTER OF SuBSTANTIAL SHAREHOLDERS

Direct Interest Deemed Interest

Substantial ShareholdersNo. of

Shares Held% of Issued

CapitalNo. of


Capital

SummitHoldingsSdn.Bhd.

DatukDr.FoongWengSum 62,231,657 31.06

Dr.FoongWengCheong 62,231,657 31.06

Note:

Deemed interested by virtue of their shareholdings in Summit Holdings Sdn. Bhd. and Sumivest Holdings Sdn. Bhd. pursuant to Section 6A of the Companies Act,1965.

DIRECTORS’ SHAREHOLDINGS AS PER THE REGISTER OF DIRECTORS’ SHAREHOLDINGS

Direct Interest Deemed Interest

DirectorsNo. of


CapitalNo. of


Capital

DatukDr.FoongWengSum 62,231,657 31.06

Dr.FoongWengCheong 62,231,657 31.06

Dato'RichardOngGuanSeng

Mr.LeongKengYuen 275,000 0.14

TuanHajiMohdJali@MohdJalilBinSany 60,000

Mr.OoiYingHong

Notes:

Deemed interested by virtue of their shareholdings in Summit Holdings Sdn. Bhd. and Sumivest Holdings Sdn. Bhd. pursuant to Section 6A of the Companies Act,1965.

Deemed interested through the shares held by his spouse.

Deemed interested by virtue of his shareholding in MJS Maju Jaya Sdn. Bhd. pursuant to Section 6A of the Companies Act,1965.



STATEMENT OF SHAREHOLDINGS AS AT 30TH SEPTEMBER 2015

THIRTY LARGEST SHAREHOLDERS AS PER THE RECORD OF DEPOSITORS

Shareholders No. of Shares% of Issued

Capital

1. SummitHoldingsSdn.Bhd. 60,581,657 30.23

2. HLBNominees(Tempatan)Sdn.Bhd.Pledged Securities Account for Chee Sai Mun

3,847,800 1.92

3. MaybankNominees(Asing)Sdn.Bhd.Exempt An for DBS Bank Limited (Client A/C)

2,965,400 1.48

4. Dr.FoongWengCheong 2,662,500 1.33

5. UOBKayHianNominees(Asing)Sdn.Bhd.Exempt An for UOB Kay Hian Pte. Ltd. (A/C Clients)

2,325,350 1.16

6. LimAhChoo 2,088,600 1.04

7. CitigroupNominees(Asing)Sdn.Bhd.Exempt An for OCBC Securities Private Limited (Client A/C-NR)

1,867,000 0.93

8. LimTaiSoon 1,697,450 0.85

9. SumivestHoldingsSdn.Bhd. 1,650,000 0.82

10. LimSengChee 1,572,500 0.78

11. PublicNominees(Tempatan)Sdn.Bhd.Pledged Securities Account for Lim Hock Fatt (E-SS2)

1,220,000 0.61

12. CIMSECNominees(Asing)Sdn.Bhd.Exempt An for CIMB Securities (Singapore) Pte. Ltd. (Retail Clients)

1,123,875 0.56

13. DatukDr.FoongWengSum 1,083,228 0.54

14. XiangLingCapitalSendirianBerhad 1,049,700 0.52

15. ChongCheongLeong 1,045,200 0.52

16. LewYuenKee@LewAhKee 1,000,000 0.50

17. HLBNominees(Tempatan)Sdn.Bhd.Pledged Securities Account for Surinder Singh a/l Wassan Singh

980,000 0.49

18. KenangaNominees(Tempatan)Sdn.Bhd.Pledged Securities Account for Seraya Makmur Sdn. Bhd. (013)

810,000 0.40

19. KenangaNominees(Tempatan)Sdn.Bhd.Pledged Securities Account for Chin Kiam Hsung

795,400 0.40

20. LimKhuanEng 780,000 0.39

21. RHBCapitalNominees(Tempatan)Sdn.Bhd.Pledged Securities Account for Teh Kian Lang (CEB)

776,500 0.39

22. PublicNominees(Tempatan)Sdn.Bhd.Pledged Securities Account for Chee Sai Mun (E-KLC)

700,100 0.35

23. CheongMeiYik 683,000 0.34

24. Triple Boutique Sdn. Bhd. 621,900 0.31

25. ChongWeiYong 604,000 0.30

26. ChongYokeSeng 590,000 0.29

27. MaybankNominees(Tempatan)Sdn.Bhd.Pledged Securities Account for Law Teck Peng

570,700 0.28

28. LimHongLiang 552,000 0.28

29. ChaiBengHwa 550,000 0.27

30. LimLuBee 501,050 0.25

TOTAL 97,294,910 48.53



PROPERTIES OWNED BY HEXZA CORPORATION BERHAD & ITS SUBSIDIARIES AS AT 30TH JUNE 2015

Location Tenure

Approximate Area

in sq. meter

Approximate Age of

Buildings in years

Net Book Value

30.6.2015RM’000

Year ofAcquisition(A)/Completion(C)/

LastRevaluation(R)

Existing usage

Lot6, TasekIndustrialEstate,TasekDrive,Ipoh,PerakDarulRidzuan.

LeaseholdExpiry2062 28,328

55 5,447 R:2012 Factory

12 2,004 C:2004 Office

10 1,663 C:2006 Factory


LeaseholdExpiry2064 12,141 - 1,753 R:2012 Factory


LeaseholdExpiry2069 12,245 - 1,779 R:2012

Vacantindustrial

land

Lot5,North Klang Straits IndustrialArea,PortKlang, SelangorDarulEhsan.

LeaseholdExpiry2086 28,317 21 10,374 R:2012 Factory

Lot799,Block7,SejingkatIndustrialEstate,MuaraTebasLandDistrict,Kuching, Sarawak.

LeaseholdExpiry2052 38,970 21 9,560 R:2012 Factory

Lot3057,Block26,KemenaLandDistrict,Bintulu, Sarawak.

LeaseholdExpiry2063 20,235 - 3,194 R:2012

Vacantindustrial

land

HEXZA CORPORATION BERHAD (8705-K)

I/We............................................................................................................NRICNo...........................................................

of ...........................................................................................................................................................................................

being a member/members of HEXZA CORPORATION BERHAD,herebyappoint:

1) NameofProxy:.......................................................................................NRICNo..........................................................

Address:...........................................................................................................................................................................

...................................................................................................No.ofSharesRepresented:..........................................

*and/or

2) NameofProxy:.......................................................................................NRICNo..........................................................

Address:...........................................................................................................................................................................

...................................................................................................No.ofSharesRepresented:..........................................

orfailinghim/her,theChairmanoftheMeetingasmy/ourproxytovoteforme/usonmy/ourbehalfattheForty-sixthAnnualGeneralMeetingoftheCompanytobeheldattheConferenceCentre,Level2,WeilHotel,JalanSultanIdrisShah,30000Ipoh,PerakDarulRidzuanonFriday,20thNovember2015at12.00noonforthefollowingpurposes:

NO. RESOLuTIONS FOR AGAINST

1. Toapprovethepaymentofafirstandfinalsingle-tierdividendof4.5senpershare(9%)forthefinancialyearended30thJune2015

2. ToapprovethepaymentofDirectors'fees

3. Tore-electTuanHajiMohdJali@MohdJalilBinSanyasDirector

Tore-appointthefollowingDirectorspursuanttoSection129(6)oftheCompaniesAct,1965:

4. (i) Dr.FoongWengCheong

5. (ii) Dato’RichardOngGuanSeng

6. (iii)DatukDr.FoongWengSum

7. ToappointMessrs.DeloitteasAuditorsandtoauthorisetheDirectorstofixtheirremuneration

Tore-appointthefollowingDirectorstoactasIndependentDirectors:

8. (i)Dato’RichardOngGuanSeng

9. (ii)TuanHajiMohdJali@MohdJalilBinSany

10. Tore-appointMr.LeongKengYuentoactasIndependentDirector

11. Toauthorisetheissuanceofupto10%oftheissuedsharecapitaloftheCompany

(Please indicatewithan"X" in thespacesprovidedabovehowyouwishyourvote tobecast. In theabsenceofspecificdirections,yourproxywillvoteorabstainfromvotingathisdiscretion)

...................................................................................Signature of Shareholder/Common Seal

* Deleteifnotapplicable Date:..................................................

Notes:1. A member, other than an exempt authorised nominee is entitled to appoint not more than two (2) proxies. A proxy may but need not be a member of the Company. 2. A member who is an authorised nominee may appoint not more than two (2) proxies in respect of each securities account held; whereas an exempt authorised nominee may appoint multiple proxies in respect of each omnibus account held.3. A member who appoints a proxy must duly execute the Form of Proxy, and if more than one (1) proxy is appointed, the number of shares to be represented by each proxy must be clearly indicated.4. An instrument appointing a proxy, in the case of an individual, shall be signed by the appointor or his attorney duly authorised in writing or in the case of a corporation, shallbeeitherunderitsCommonSealorunderthehandofanofficerorattorneyofthecorporationdulyauthorised.5.ThedulyexecutedFormofProxymustbedepositedattheregisteredofficeoftheCompanynotlessthanforty-eight(48)hoursbeforethetimesetforholdingthe meeting or any adjournment thereof.6. Only members whose names appear in the Record of Depositors as at 13th November 2015 will be entitled to attend and vote at the meeting.

No. of Shares Held

CDS Account No.

Proxy Form

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THECOMPANYSECRETARY

HEXZA CORPORATION BERHADLot6&20,PersiaranTasek,KawasanPerindustrianTasek,31400Ipoh,PerakDarulRidzuan,Malaysia.

AffixStamp

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2015 annual report - ::hexza corporation berhad::annual report 2015 5 notice of annual general...

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